Construction projects in UAE to hit $315bn in 2014
EC Harris predicts construction prices in country to rise by 4-5%
The volume of announced and planned projects in the UAE in 2014 is expected to be valued at $315bn.
And as of May 2014, $212bn worth of construction projects are currently under construction.
As a result, the UAE’s construction market is predicted to return to near full capacity with a number of megaprojects in the pipeline and the ramping up of social infrastructure spend, according to EC Harris’ 2014 International Focus on the UAE report.
“The UAE has experienced a shifting momentum of activity over the past decade with 2009 onwards being difficult years for the market. The dynamic has changed from a period of negative to low inflation over the last few years to a period of moderate increase,” said Christopher Seymour, partner and head of property and social infrastructure at EC Harris.
“The market is finally showing real signs of recovery and prospective growth suggesting that the construction market will remain strong this year.”
The report takes into account the UAE’s estimated real gross domestic product (GDP) growth, accelerated momentum across industry sectors, market conditions and construction tender price levels.
According to EC Harris’ Construction Cost Index, construction prices in the UAE are set to rise by 4 to 5% over the duration of the year and approximately 6% in 2015.
Furthermore, the report highlights key discrepancies between the emirate of Abu Dhabi and Dubai as both cities are the country’s growth drivers. Dubai’s real estate market is stronger and more sustainable whilst Abu Dhabi’s market is steady; however, the report states the capital may increase construction spend in the latter half of 2014 and early 2015.
Seymour added: “We are seeing tenders in the market covering the full range of projects including large scale programmes and also smaller schemes right down to the small fit out work. To this extent, the market is showing a healthy profile with opportunities for SME and large international contractors and joint ventures. Similarly, the supply chain at all levels is seeing strong growth across the range of schemes.”