GlobalData expects the economic output of the UAE’s construction industry to expand by 5.6% in real terms in 2024, supported by improving economic conditions, and public and private sector investment in the construction of major projects in the transportation, energy, and housing sectors.

Growth in 2024 will also be supported by elevated oil prices, net-zero emission targets, expanding real estate markets, and greater regional integration.

The growth in output during 2024 reflects the sharp uptick in contract awards across the UAE recorded by regional projects tracker MEED Projects.

Looking ahead, the UAE construction industry is expected to register annual growth of 3.9% from 2025 to 2027, supported by investments in infrastructure, renewable energy, oil and gas, housing, industrial and tourism projects.

Real estate

The growth rates vary slightly across the five subsectors of construction. For the residential construction sector, GlobalData forecasts growth of 5.5% in real terms in 2024, before recording an annual average growth rate of 2.7% between 2025 and 2028, supported by private investments in the residential housing sector, along with the government’s initiatives to meet the rising housing demand domestically.

 The residential construction sector is expected to expand by 5.5% in real terms in 2024, before recording an annual average growth rate of 2.7% between 2025 and 2028, supported by private investments in the residential housing sector, along with the government’s initiatives to meet the rising housing demand domestically.

For commercial construction, GlobalData expects the commercial construction sector to expand by 6.6% in real terms in 2024, before registering an annual average growth rate of 5.6% between 2025 and 2028, supported by a recovery in tourism activities, coupled with investments in the hospitality sector.

The industrial sector is expected to grow by 4.6% in real terms in 2024 and register an annual average growth rate of 3.2% from 2025 to 2028, supported by investments in the industrial and manufacturing sector.

The infrastructure construction sector is expected to expand in real terms by 5.9% in 2024, before recording an annual average growth rate of 4.6% during the forecasted period (2025-2028), supported by investments in road and rail infrastructure projects.

The energy and utilities construction sector is expected to expand in real terms by 5.3% in 2024 and grow at an annual average rate of 3.7% from 2025 to 2028, supported by investments in renewable energy, oil and gas, and water infrastructure projects.

The institutional construction sector is expected to grow by 5% in real terms in 2024 and register an annual average growth rate of 3.4% from 2025 to 2028, supported by investments in healthcare and education building projects.