The UAE construction market remains on course to grow at a faster pace than the wider economy, fuelled by infrastructure spending in Dubai, according to one analyst.
BMI Research is forecasting growth of 6.6 per cent for the UAE construction market this year, considerably ahead of the IMF’s forecast of 2.6 per cent growth for the wider economy.
The value of the UAE’s construction industry is set to increase to Dh181 billion next year from about Dh162bn this year, the company said. BMI Research also predicts growth of more than 6 per cent for the following three years as Dubai ramps up spending ahead of Expo 2020, but a fall-off of 2 to 3 per cent a year after 2020.
It said that Dubai’s planned projects in real estate and energy are “progressing well”, but said that Abu Dhabi had been more exposed to the downturn in commodities as government and private sector spending were more reliant on the oil and gas market.
Using remittances from the emirate to Pakistan as a proxy for construction activity (because so many labourers in Abu Dhabi come from the country), it said there was a slowdown in activity for most of last year.
Despite this, BMI Research said that major projects such as the Route 2020 Metro extension on the Red Line in Dubai, the expansion of Jebel Ali Port and Al Maktoum Airport would continue to drive activity. It said that even the postponed Etihad Rail phase two – the link to Dubai and Abu Dhabi – is likely to be built, as it has been assured funding by the Federal Government and there remains a solid business case for the UAE to build its own network, regardless of the wider GCC project.
“The UAE would gain a major competitive advantage over regional peers with the introduction of a rail service,” the report said. “Congestion on the UAE’s road networks has become a major issue, so removing significant volumes of freight traffic would be of benefit to businesses and the population.”
William Bodie, an executive vice president at the US-based building consultancy Parsons, agreed with the report’s assertion that Dubai is likely to drive growth in the near future. “In our work as a consultant, we’re seeing a heavier volume of proposals and work orders in Dubai as compared with Abu Dhabi.”
Yet Patrick McKinney, the head of Gulf States for the contractor BAM International, said that BMI Research’s 6 per cent growth figure was “very optimistic”. “The real estate sector in Dubai is holding up for now, but generally I don’t think anyone is saying it is growing at 6 per cent. A lot of stuff has been … pushed back and delayed,” Mr McKinney said.
“If you talk to the big consultants, they’re laying people off, which is a harbinger of bad times coming.”
mfahy@thenational.ae
Follow The National's Business section on Twitter
Company profile
Name: Cashew
Started: 2020
Founders: Ibtissam Ouassif and Ammar Afif
Based: Dubai, UAE
Industry: FinTech
Funding size: $10m
Investors: Mashreq, others
More on animal trafficking
Most polluted cities in the Middle East
1. Baghdad, Iraq
2. Manama, Bahrain
3. Dhahran, Saudi Arabia
4. Kuwait City, Kuwait
5. Ras Al Khaimah, UAE
6. Ash Shihaniyah, Qatar
7. Abu Dhabi, UAE
8. Cairo, Egypt
9. Riyadh, Saudi Arabia
10. Dubai, UAE
Source: 2022 World Air Quality Report
MOST POLLUTED COUNTRIES IN THE WORLD
1. Chad
2. Iraq
3. Pakistan
4. Bahrain
5. Bangladesh
6. Burkina Faso
7. Kuwait
8. India
9. Egypt
10. Tajikistan
Source: 2022 World Air Quality Report
PETER PAN & WENDY
Director: David Lowery
Stars: Alexander Molony, Ever Anderson, Joshua Pickering
Rating: 3/5
Gully Boy
Director: Zoya Akhtar
Producer: Excel Entertainment & Tiger Baby
Cast: Ranveer Singh, Alia Bhatt, Kalki Koechlin, Siddhant Chaturvedi
Rating: 4/5 stars
More from Rashmee Roshan Lall
MEDIEVIL (1998)
Developer: SCE Studio Cambridge
Publisher: Sony Computer Entertainment
Console: PlayStation, PlayStation 4 and 5
Rating: 3.5/5
Top goalscorers in Europe
34 goals - Robert Lewandowski (68 points)
34 - Ciro Immobile (68)
31 - Cristiano Ronaldo (62)
28 - Timo Werner (56)
25 - Lionel Messi (50)
*29 - Erling Haaland (50)
23 - Romelu Lukaku (46)
23 - Jamie Vardy (46)
*NOTE: Haaland's goals for Salzburg count for 1.5 points per goal. Goals for Dortmund count for two points per goal.
The specs
Engine: 1.8-litre 4-cyl turbo
Power: 190hp at 5,200rpm
Torque: 320Nm from 1,800-5,000rpm
Transmission: Seven-speed dual-clutch auto
Fuel consumption: 6.7L/100km
Price: From Dh111,195
On sale: Now
'The Batman'
Stars:Robert Pattinson
Director:Matt Reeves
Rating: 5/5
Company profile
Name: Steppi
Founders: Joe Franklin and Milos Savic
Launched: February 2020
Size: 10,000 users by the end of July and a goal of 200,000 users by the end of the year
Employees: Five
Based: Jumeirah Lakes Towers, Dubai
Financing stage: Two seed rounds – the first sourced from angel investors and the founders' personal savings
Second round raised Dh720,000 from silent investors in June this year
COMPANY PROFILE
Name: SmartCrowd
Started: 2018
Founder: Siddiq Farid and Musfique Ahmed
Based: Dubai
Sector: FinTech / PropTech
Initial investment: $650,000
Current number of staff: 35
Investment stage: Series A
Investors: Various institutional investors and notable angel investors (500 MENA, Shurooq, Mada, Seedstar, Tricap)
UAE currency: the story behind the money in your pockets
ROUTE TO TITLE
Round 1: Beat Leolia Jeanjean 6-1, 6-2
Round 2: Beat Naomi Osaka 7-6, 1-6, 7-5
Round 3: Beat Marie Bouzkova 6-4, 6-2
Round 4: Beat Anastasia Potapova 6-0, 6-0
Quarter-final: Beat Marketa Vondrousova 6-0, 6-2
Semi-final: Beat Coco Gauff 6-2, 6-4
Final: Beat Jasmine Paolini 6-2, 6-2