UAE construction sector to grow up to 10% in 2020

Although industry heads cite time and cost overruns, as well as project financing, as hurdles

UAE construction sector to grow 6 to 10% in 2020, according to KPMG's global construction survey. Mona Al Marzooqi / The National

The construction sector in the UAE is expected to grow 6 to 10 per cent in 2020, the majority of industry executives surveyed by KPMG said.

However, time and cost overruns (cited by 44 per cent of executives) are still seen as substantial hurdles facing projects, alongside gaining funding (31 per cent).

“The construction sector is the lifeblood of the UAE economy and it is very encouraging to see that the industry is expecting single to double-digit growth this year,” said Sidharth Mehta, a partner at KPMG Lower Gulf.

Some 53 per cent of executives forecast growth of 6 to 10 per cent next year, and a further 20 per cent expect the market to grow by more than 10 per cent. However, 27 per cent expect the market either to remain flat or only achieve slower growth of up to 5 per cent.

When asked which areas need to improve to enhance industry performance, 42 per cent of those surveyed highlighted human capital, 33 per cent cited technology and 25 per cent said governance and processes.

“As the pace of disruption accelerates, leaders will have to consider implementing a three-pronged approach to rationalise governance and controls, optimise human performance and innovate with technology, to become more future-ready,” Mr Mehta said.

The UAE is already seeing technological disruption in the sector, through 3D printing and automation.

According to KPMG’s global findings, the use of robots, unmanned aerial vehicles (UAV) and "intelligent" tools and equipment will continue to automate many of the less complex and high-risk tasks on construction sites, leading to a leaner, more specialised and digitally-enabled workforce.

Looking ahead, more than 80 per cent of UAE industry leaders felt that digital modular fabrication will be widely implemented within the next 10 years. Some 56 per cent expect intelligent construction equipment to be used and 25 per cent expect more use of robots. The use of data analytics and predictive modelling will also play an important role in the next five years.

People still form the backbone of the industry and leaders need to invest in human capital to drive overall performance and ensure on-time project delivery, according to the survey.

“Construction companies that continue to invest in people and implement a technology-enabled strategic roadmap will be well positioned to face industry disruption and improve their capital and program performance, putting them on the fast-paced track to growth”, Mr Mehta added.