Construction labour costs are set to jump 6 per cent in the UAE this year as the industry returns to near full capacity.
As of May, some US$212 billion worth of building projects were under construction across the country, according to EC Harris, a built asset consultancy firm.
“Over the last quarter barely a week goes by without a new major property development being unveiled. The Dubai Government has also stated that all new and existing construction projects are going to be fast-tracked to be ready for the Expo2020,” the report said.
While construction tender prices dropped by about 4 per cent last year, an Expo-driven industry growth spurt is expected to result in tender prices rising by as much as 5 per cent this year and by 6 per cent next year.
Inflationary pressures are expected to grow across the industry this year as projects move from the consultancy supply chain to the construction supply chain, said Christopher Seymour, a partner at EC Harris.
The Abu Dhabi construction market remained stable during the first half of this year with more projects expected to get under way in the second half, boosting construction spending for the remaining part of this year and into 2015.
Sharjah is also progressing, boosted by “the influx of people from the Arab Spring” which is likely to drive social and infrastructure spending.
Despite the rise in demand across the sector, costs have been contained by softer underlying commodity prices with copper, cement and rubber prices declining over the past year.
Crude oil has been less volatile, which has helped to stabilise the diesel needed to power cranes, diggers and site generators.
selgazzar@thenational.ae
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