Construction firms among the latest payers in UAE
Research conducted by Coface found that construction firms were among the latest payers in the UAE in 2016, with delays of up to four months
Construction firms were among the latest payers in the UAE during 2016, with payment delays of up to four months.
Research conducted by Coface found that, on average, the amount of time that UAE companies had to wait to receive payments in 2016 doubled, according to The National.
The newspaper reported that approximately 800 firms exited the UAE last year due to an inability to settle their debts.
Massimo Falcioni, chief executive officer for Middle East countries at Coface, commented: “We have seen our business jump 63% in the last two years as firms sought a way of mitigating risk.
“I believe 2017 will be better than 2016 because many of the fragile firms are no longer in the UAE. Also, firms have rationalised and streamlined their businesses, lessening their labour costs by 35% to 45%. [They have also] reviewed credit policies and some [are] now demanding advance payment,” he told The National.
Coface predicts that growth will be driven by the UAE’s tourism and finance sectors, forecasting the country’s gross domestic product (GDP) to grow by 2.5% in 2017.
However, the France-headquartered insurer expects that the Emirates’ construction industry will continue to experience difficulties throughout the course of the year.