Despite containing all the usual catchphrases associated with landmark projects - 'one of its kind', 'a new chapter in modern architecture', 'a panel of award winning international architects and structural engineers' - the report appears to have been a practical joke. Indeed, the suspicion was that the source of the story had used Bubble City as a veiled reference to the Dubai construction boom.

Although the bursting of the emirate's construction bubble has been long been predicted, there is little sign that it is going to happen any time soon. This summer, tendering is under way for the world's highest tower, the 705-metre-high Burj Dubai, the world's biggest shopping centre, the Dubai Mall, and the largest package - AX059 - on the $4,200 million Dubai International Airport expansion project.

Those three contracts alone will inject a further $2,500 million worth of new business into an already booming market by the end of the year. By then, bidding should be well under way on another round of high-profile projects, ranging from the $1,200 million Atlantis development on Palm Jumeirah to the multi-billion dollar Dubailand complex. Add to the list the numerous residential and office towers planned along Sheikh Zayed highway, at Jumeirah Lakes and on the Dubai International Financial Centre site and it is not difficult to see why contractors are predicting plentiful work for at least another three years.

Upturn

Dubai is not the only Gulf state witnessing a sharp upturn in construction activity. The civils market has seldom been busier in Qatar, where the launch of a long-awaited $20,000 million government infrastructure programme has coincided with a sharp increase in privately backed office and residential tower projects in West Bay. Similar pictures can be seen in Bahrain, Kuwait and Oman: higher public spending has been accompanied by strong private sector activity in hotel, commercial and leisure projects.

Saudi Arabia, too, has seen a spate of major contract awards from leading developers for new residential and shopping mall space. Even in Abu Dhabi, a market that in relative terms has been quiet over the past two years, there are signs of more buoyant times ahead. Plans have been drawn up for a major redevelopment of the central Abu Dhabi souk and for more than 50 high-rise towers to be built at Raha Beach, while a long-awaited expansion of the international airport is expected to proceed once revised designs have beenprepared.

Five years of high oil prices have driven the strong recovery of the Gulf construction sector. But of equal importance are changes to property ownership rules. Qatar and Oman are the latest looking to follow Dubai and Bahrain in allowing expatriates to own freeholds. The liberalisation of the property sector has at a stroke created an entirely new market for contractors and opened the floodgates to investment from regional trading groups, investment houses and a new band of real estate developers such as Dubai's Nakheel and Emaar Properties.

'You only need to look at the make-up of contractor order books to see what a change there has been in the public/private sector workload,' says one leading regional contractor. 'A decade ago, many contractors would count on the public sector for 80-90 per cent of their business and the private sector for 10-20 per cent. Now, it is not unusual to find companies where 60-70 per cent of orders are from the private secto