Generalisations should, as he says, be avoided, but one generalisation probably holds true: if you are exporting to the Middle East, the price of oil affects almost everything.

“Oil and gas is the financial driver,” he says, “but not everything relates to oil itself; it is about finance.”

Consider, for example, Saudi Arabia. “Manufacturing is not an important factor there. Oil is important: until three or four years ago the oil industry was our strongest market for hoists and lifting gear. Now it is more spread and diversified. There is infrastructure, and new infrastructure projects. There is work on oil refineries, water plants, railways, subways, bridges, all needing our products. Saudi Arabia has diversified, more than other countries in the region.”

But the diversification is funded by oil: “Saudi needs an oil price of $80–$90 a barrel to have its economy on a stable level,” says Zaremba.

Through 2017 oil averaged $54 per barrel; in 2018 the figure was $71. Current developments in the Straits of Hormuz are causing predictions of a rise.

“Two years ago projects were moving well,” he says. “But now there are huge delays. It can take one or two years for the finance for a major project to be closed. In Saudi, the finance is usually provided by the government. If Saudi starts producing more oil, then there is a chance of change. If they carry on producing the same number of barrels a day, there will be no change.”

Suhan Shetty is Middle East export manager for Street Cranes; he reports similar experiences. “For the past 12–18 months the market has been very slow,” he says. “There were lots of enquiries, and those were strong; they went all the way to the final stage. But at that point, they ground to a halt: none of them materialised. We have not lost ground, but we have not gained it either, and I believe it is the same for other manufacturers. There are still some big enquiries that we are working on, but the key is that the money flow has slowed down.

“There is no investment. Customers have told us that the banks stopped lending back in January—and most lending in Saudi is state guided. Ramadan is traditionally a quiet time; when it ended [on 5th June] people were half-hoping, half-expecting that the market would pick up. Whether it will or not we shall have to wait and see.”

“It is an odd market at the moment,” says Marcus Curry. He is in charge of Middle East marketing for George Taylor Lifting Gear (GT Lifting), which has been trading in the area for 45 years. In 2005 GT set up its own company in the United Arab Emirates as a distribution arm. “It is a market on hold, if you like,” he says. “Everyone is waiting for something to happen. If customers are not sure of the future, and funding is not seen, it becomes a hand-to-mouth existence. So we keep our stocks at a reasonable level, but wait to invest until we see orders and payments. We are standing by for boom and bust but it is suspended animation at present.”

Saudi Arabia may be the biggest country in the region, but it is not the only one. Nevertheless, it is influential. As Curry puts it: “Saudi Arabia has eased back a lot on project spends, which has prompted other countries to do the same.”

“United Arab Emirates [UAE] is an interesting country,” says SWF’s Zaremba. “About 12 years ago American investors saw it as a huge development boom, a fountain for return on investment. It was promoted as a new paradise for tourism, a real hot spot of the world. After a few years they realised that it was only going to be a dream. Europeans cottoned on that it was a fantasy and removed their investments as well. Then it was the turn of Africans to invest.”

UAE is not so reliant on oil, which makes up around 30% of its economy, and more reliant on foreign investment; most of that investment, says Zaremba, has been related to infrastructure projects rather than oil. “That meant there was a need for overhead cranes. Our products have been moving quite well there for the past ten or 12 years, but now the economy has slowed there as well.

“But UAE’s Expo 2020, to be hosted in Dubai, is a big project just now. Most infrastructure development at the moment is related to that. They want to make a big show for the event, so almost everything we sell now ties in with it somehow.”

“Customers in UAE suggest that there are other projects there which may develop,” says Curry. “But we tend to see evidence of such projects six to 12 months ahead, and we are not seeing that; so maybe the projects are still a year or two down the pipeline.”

But there are some other big projects in the region that are needing construction and lifting equipment.

“I was in Kuwait recently,” says Street Crane’s Shetty. “There are massive infrastructure projects there. There is the showcase Palm Island development, there are new roads, and new townships going up. It is not a manufacturing hub; it has its own aluminium plant and a steel plant but there is nothing in sectors like automotive or electrical, and very little in the mid-scale. As far as hoists are concerned, oil, gas, the aluminium plant and small factories are the customers. Most factories, such as they are, are expanding. Big local companies seem not to be affected by the lending freeze. After Ramadan last year in 2018 it was expected that banks would start giving loans. It didn’t happen.

The market for lifting machinery has been on hold, but is poised to move upwards