UAE Construction Continues Strong Performance Across Sectors

The latest RICS Global Construction Monitor reveals that construction activity in the United Arab Emirates’ (UAE) continues to hold strong. The emirate’s construction sector reported a healthy construction activity figure overall (+54%), indicating a strong sentiment towards active growth in building activity.

Reassuringly, growth is not limited to any sector – it is found across both private and public sector developments, with private residential, private non-residential, and public sector projects posting +58%, +38%, and +59%, respectively. These figures communicate clear and consistent activity across the board, continuing a trend that has lasted for almost two years, post-pandemic.

The UAE’s construction sector is however experiencing the usual challenges that well-performing markets face. Chief among the elements holding back activity are shortages of professionals as well as rising prices for building materials. Some respondents noted competition with Saudi Arabia for skilled professionals and resources in the region, propping up costs. There is now a large proportion of respondents (61%) referencing the weather as a key factor negatively impacting work, which is expected in the hot summer months.

Overall, the UAE’s construction sector remains largely unchanged on the previous quarter, and all indicators appear to show that the consistent, cross-sector growth witnessed since the end of the pandemic is set to continue for the foreseeable future. Skills shortages and rising resource costs remain an ongoing challenge, but every metric indicates a resilient sector that will continue to grow for the time being.

RICS Chief Economist, Simon Rubinsohn, said: “Construction activity continues to grow across much of world with workload indicators particularly strong in parts of the Middle East such as KSA and UAE as well as in India. By way of contrast, there appears to be little evidence of any turnaround in China and Hong Kong while Qatar still seems to be suffering a post-World Cup hangover. There are some early signs of encouragement regarding a tentative recovery in Europe while the feedback from North America remains solid.

“The stuttering performance of the global economy is clearly not helping the sector with financial concerns weighing heavily on many construction businesses according to respondents to the survey. But significantly, it is the issue of skills that continue to be cited as a key challenge for the industry as it seeks to address some of the critical issues including the shortfall in housing across much of the globe and the need to upgrade infrastructure to meet the challenges of climate change.”