UAE: Contracts worth $45bn to be awarded in 2017
The UAE’s construction sector will grow by approximately 4% in 2017, compared to forecasts for 2016, according to Faithful+Gould’s David Clifton
The UAE’s construction sector will witness growth of approximately 4% in 2017, compared to 2016 estimates, as work ramps up on projects connected to Expo 2020, Dubai Creek Harbour, and Dubai South.
This is the view of David Clifton, regional development director at Faithful+Gould, who forecasts that contracts worth $45bn (AED165bn) will be awarded in the UAE during the course of next year.
In his Q3 2016 UAE update, Clifton predicted a “small level of recovery” for the UAE’s construction market in 2017. However, he also noted that declining global liquidity could lead to an extended timeline for some mixed-use projects in the Emirates.
“Looking forward to 2017, we forecast a small level of recovery in construction awards as Expo 2020, Dubai Creek Harbour, and Dubai South developments are contracted and move to site,” Clifton explained.
“At this stage, we are expecting approximately $45bn (AED165bn), 4% growth compared to 2016’s forecast. However, this figure will still fall short of that required to support the industry at 2014/15 levels.”
Clifton continued: “With global liquidity declining 8% from Q1 2015 to Q1 2016, a tightening in credit standards locally, and contracting real estate prices, there is a sizeable minority of mixed-use schemes in the UAE, which are now borderline feasible or unfeasible, that are likely to undergo reassessment.
“The effect on the UAE’s pipeline of planned projects won’t be dramatic, but it will extend the delivery horizon of $860bn-plus (AED3.16tn-plus) of schemes from approximately 10 to 25 years,” he added.
To read Clifton’s UAE and Saudi Arabia updates for Q3 2016 in full, check out the upcoming issue of Construction Week.