3 min read
UAE's Construction Sector Proves to Be Consistent
Published 7 Feb 2024
The recent global construction monitor RICS report introduces a steady rise in global construction activity, including the Middle East and Africa (MEA). [?]
The construction activity index (CAI) for the MEA region returned a figure of +27 in quartal 4 (Q4), indicating ongoing expansion for the twelfth consecutive quarter. However, it is slightly lower than the previous quarter's +34.
The construction activity index (CAI) for the MEA region returned a figure of +27 in quartal 4 (Q4), indicating ongoing expansion for the twelfth consecutive quarter. However, it is slightly lower than the previous quarter's +34.
Global Construction Monitor
Source: https://www.rics.org/
Source: https://www.rics.org/
Meanwhile, Mauritius, the UAE, and others all posted positive CAI figures, with some showing improvement from the previous quarter. Nevertheless, the United Arabian Emirates' construction sentiment is robust.
The construction industry in the UAE is a dynamic sector experiencing various shifts and challenges across different regions. Here's a comprehensive overview of the current market dynamics and trends affecting construction professionals in Abu Dhabi, Dubai, and Ras Al Khaimah.
The construction industry in the UAE is a dynamic sector experiencing various shifts and challenges across different regions. Here's a comprehensive overview of the current market dynamics and trends affecting construction professionals in Abu Dhabi, Dubai, and Ras Al Khaimah.
Abu Dhabi Conditions
The Abu Dhabi construction market is characterized by robust growth and a strategic focus on diversifying the economy away from hydrocarbons.
In 2022, the construction sector in Abu Dhabi grew by 7.6% to AED 86 billion (approximately USD 23.4 billion), contributing 7.8% to the emirate's GDP.[?]
According to interviewees, Abu Dhabi's construction sector is facing the following challenges:
Demand-driven market fluctuations impact project activity
Skills migration to Saudi Arabia affects the availability of skilled staff
Indecisiveness among Project Management Consultants (PMCs)
Material demands cause delays in project completion
Project financing challenges may hinder project development
Emiratization initiatives aim to increase the number of local workers
Competition-driven pricing and quality standards affect project outcomes
Dubai Construction Affairs
The Dubai construction market is a significant component of the UAE's construction industry, which was valued at $88.4 billion in 2022 and is projected to achieve an average annual growth rate (AAGR) of more than 3% from 2024 to 2027.[?]
Dubai experience consists of these types of obstacles:
Dubai experience consists of these types of obstacles:
Lack of capable contractors and nationalization programs affect workforce availability
Inflation, escalation, and parts shortages pose challenges
Skilled and unskilled labor shortage
Low tender prices affect project viability
Limited usage of advanced technologies like BIM and 3D printing
Credit issues and stakeholder commitments influence regulatory compliance
Procurement and logistics challenges affect project management
In recent years, Gulf Region demand has driven construction activity, which caused qualified skills to drain. However, you can still control the workforce engaged in your construction project using ERP programs.
How to Address Local Challenges
There are and will be issues in the construction sector in Abu Dhabi, but minimizing their damage to your business is possible using the FirstBit ERP solution. Our software will help you solve problems, such as indecisiveness among PMCs.
Our ERP platform allows you to streamline project management processes, facilitating better stakeholder collaboration and decision-making. With integrated project management modules, PMCs can track project milestones, monitor progress, and communicate effectively to ensure timely decision-making.
FirstBit ERP software also offers comprehensive human resource management modules to track employee skills, certifications, and availability. By centralizing workforce data, companies can identify skill gaps and proactively address staffing challenges through recruitment, training, or subcontracting.
Our ERP platform allows you to streamline project management processes, facilitating better stakeholder collaboration and decision-making. With integrated project management modules, PMCs can track project milestones, monitor progress, and communicate effectively to ensure timely decision-making.
FirstBit ERP software also offers comprehensive human resource management modules to track employee skills, certifications, and availability. By centralizing workforce data, companies can identify skill gaps and proactively address staffing challenges through recruitment, training, or subcontracting.
The UAE construction market presents both challenges and opportunities for industry professionals. By understanding the market dynamics and adapting strategies to address workforce shortages, material costs, and regulatory requirements, construction companies can position themselves for success in the evolving landscape of the UAE construction industry.
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