The economic output of Oman's construction sector declined by 12.6% despite an increase in the country's quarterly gross domestic product (GDP).

The sultanate's GDP increased by 6.5% in Q1 2018, with non-oil growth, including real estate deals, driving an upswing for the economy.

Construction and the service sector were the only two major industries to record a decline in the first quarter, Dr Ali bin Masoud Al Sunaidi, Oman's Minister of Commerce and Industry, said during a talk at the Sultan Qaboos University in Muscat, according to state news agency, ONA.

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Real estate, leasing, and commercial activity in the property market increased by 6.5%, with the best performer being the manufacturing sector, which witnessed growth of 17.6%.

Other non-oil industries that performed well in Q1 2018 were mining and quarrying (15%), basic chemicals (14%), and agriculture and fisheries (7.6%). 

Buoyed by burgeoning tourism, Oman's hotel and restaurant sector registered a 7.2% rise in its contribution to national GDP.

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News of construction decline, however, contrasts sharply with a 2018 report by BMI Research, which predicted that growth in Oman's building sector would outperform the regional average between now and the end of 2019.

The report's predicted growth of 10.4% in 2018 and 11.5% in 2019 was markedly higher than the regional average of approximately 7%.