UAE market intelligence: construction industry remains resilient
In our latest UAE market intelligence report, our survey findings revealed a divide in market sentiment, with some remaining optimistic and others expressing apprehension. The findings reflect the complexity of the current market landscape and the importance of adopting adaptive strategies. Despite challenges such as supply chain constraints and labour shortages, the UAE construction industry remains resilient and optimistic for future growth.
A shrinking pool of available contractors, due to a warming trend in the industry, is leading to decreased bidding activity, potential delays in project commencement and cost escalations. This runs risk of affecting overall market dynamics. However, despite this, sectors such as residential, transport and infrastructure demonstrate promising growth.
Residential and mixed-use sectors continue to thrive
Residential and mixed-use developments were top-performing sectors in the second half of 2023, according to survey findings. Residential construction has shown strong performance, driven by factors such as demand for upscale properties and government initiatives promoting sustainability, as well as government support for housing loans.
While there has been a decline in the perceived performance of commercial and office developments, they are expected to pick up due to investments in tourism. Industrial construction may also see growth due to increased licenses and exports.
Accelerating growth through infrastructure investment
Investment in infrastructure is crucial for the UAE's long-term growth ambitions and is expected to expand due to government investment. The government has plans to invest AED10bn in infrastructure partnership projects as part of their accelerator programme, and in addition, various ongoing projects aimed at improving the country's rail and road networks are continuing to pick up pace. These projects are expected to not only boost economic opportunities but also reduce carbon emissions.
Digitalisation reshaping UAE construction
Increasing digitalisation in the UAE construction industry is being driven by initiatives such as the UAE Digital Government Strategy 2025 and the growing understanding of the benefits that digitalisation can offer, including improved efficiency and collaboration. The implementation of tools such as building information modelling, drones, virtual reality and artificial intelligence, demonstrate that many recognise the benefits of digitalisation, however while barriers such as cost concerns and knowledge gaps exist, there is still a long way to go before the benefits are fully realised.
To further drive digital transformation, companies are implementing digital maturity assessments to improve efficiency, empower personnel, and facilitate informed decision-making.
