An optimistic outlook can benefit GCC construction
The current economic climate may be presenting significant challenges for the Gulf’s construction sector, but there are plenty of reasons for optimism if we look hard enough
As we move into the final portion of 2015, the time has come to reflect on the past 12 months and look ahead to the coming year.
To say that this has been a challenging period for the Gulf’s construction sector would hardly be contentious. This year, GCC governments have had to make adjustments to account for significantly reduced revenues, owing to the ongoing stagnation of global oil prices. As such, national budgets have been reprioritised, and although public investment in construction and infrastructure has – by and large – remained stable, many are expecting a regional tightening of the belt in 2016 and beyond.
So far, contractors appear to have borne the brunt of economic uncertainty. The third quarter of 2015 brought with it a series of high-profile profit losses, with firms like Arabtec and Drake & Scull International (DSI) taking significant hits. Interestingly, big-name developers – including Abu Dhabi’s Aldar and Dubai’s Emaar – seem to be thriving in the current market.
However, if the driving force behind this trend is – as some suspect – contractors’ and developers’ relative positions in the supply chain, low oil prices could begin to drain the coffers of the latter before long.
But perhaps the industry would benefit from taking a step back and looking at the bigger picture. Today’s construction market might not be cooking on gas (or oil, for that matter), but there are plenty of feel-good stories from which we can all take heart.
Consider that of Aecom, which on UAE National Day 2015, will celebrate the 50th anniversary of its first contract signing in the Emirates. In this week’s issue, Riad Nashif, Aecom’s managing director in the UAE and executive vice president in the Middle East talks to Construction Week about his employer’s last half-century of business in the Emirates, and explains how the consultancy is preparing for the next 50 years.
Encouragingly, it’s not just Aecom that has good news to tell. Last week saw the online publication of the full shortlist of nominees for Construction Week Awards 2015. There is nowhere near enough space to give full details here; if you want to see which companies, individuals, projects, and initiatives made the cut, visit www.constructionweekonline.com. Suffice to say, with almost 200 entries across 14 categories, there are plenty of positive stories out there if you look hard enough.
Regardless of the oil price – or any other market variable – construction is essential for the Middle East. Companies such as Aecom – with half a century of experience in the Emirates – and all of those shortlisted for the upcoming CW Awards, know full well that crises come and crises go. It’s the way in which the construction sector reacts to adversity that makes the long-term difference.
The fact that the Middle East’s construction community remains in high spirits despite current challenges, certainly bodes well for the future.