UAE largest GCC construction market, says Dubai Chamber

The United Arab Emirates is the largest construction market in the GCC, according to a recent Dubai Chamber report.

The report, Construction Sector Outlook: Challenging 2010, Promising 2011, revealed that more than US$714.8bn worth of construction projects are currently at design stage or underway in the UAE. Around US$629.5bn of which is real estate and construction work, US$75.1bn infrastructure and US$10.2bn water and waste projects.

As a percentage, the UAE represents 52 per cent of total infrastructure and construction projects in the GCC.

The UAE’s largest projects include community development Capital District, which has a budget value of US$40bn and construction contracts are due by the end of this year. Yas Island, which is now completed, cost around US$37bn, while Masdar City and Saadiyat Island have a budget of US$22bn and US$27.5bn respectively. Al Raha Beach, which has a completion date of 2019, has a budget of US$15bn, while Dubai Road Transport Authority’s ongoing road extension work has a US$12bn budget. 

The second most active country in the GCC is Saudi Arabia, with US$283.8bn worth of projects in the pipeline, followed by Kuwait with US$170.2bn. Qatar currently has US$55.9bn worth of construction projects currently at design stage or underway, Oman US$27.6bn and Bahrain has US$36.9bn.

The report said: “Whilst it is of no surprise that the UAE is still the largest construction market in the GCC, what has changed is that the market is being driven by development projects in Abu Dhabi whilst until recently it has been Dubai’s real estate projects that have dominated the industry.

“The rapid economic diversification that the UAE has achieved over the years has come primarily from its large construction sector boom. The government has been clear in its mandate to economically diversify the economy and the construction sector has played a critical part in this.”

The report concluded that while the global economic slowdown of 2008 brought an abrupt end to the UAE’s construction boom, construction developers in the UAE are expecting a more promising 2011 and beyond

It continued: “Following a challenging period in 2009 and this year, construction developers in the UAE are expecting a more promising 2011 and beyond. In recent months, firms are branching into new markets, switching focus from private to public sector schemes and forming new alliances in a bid to win work in an increasingly competitive environment. This trend is expected to continue in the short term with the UAE government’s drive to stimulate the economy by spending heavily on infrastructural projects, particularly in Abu Dhabi.”