- Production value of UAEs construction sector hit $80bn in 2014
- Value topped 2008 peak of $79.5bn
- Contract awards in 2015 have slowed
The UAEs construction sector in 2014 topped the peak it achieved in 2008, with a production value of AED295bn ($80bn).
In 2008, which was the peak of Dubais and Abu Dhabis real estate boom, the production value for the construction sector reached AED292bn.
The statistics for 2014, compiled by the National Bureau of Statistics, were revealed by UAE Vice-President and Prime Minister and ruler of Dubai Sheikh Mohammed bin Rashid al-Maktoum, who highlighted the fact that the value of the construction sector in 2014 was almost double the AED155bn it was worth when he took charge of the UAE cabinet in 2006.
In an open letter on his website published on 20 June, Sheikh Mohammed reviewed the UAEs economic performance in 2014 and outlined his expectations for 2015, which include continued investment in construction and infrastructure schemes.
We expect to continue to achieve strong growth in 2015 as work continues with a large number of infrastructure projects, such as the expansion of national airports, with a total cost of AED100bn, and the construction of the AED40bn Union [Etihad] rail network, in addition to roads and transport projects, improved tourist facilities, electronic infrastructure, real estate and financial services, the letter said.
Sheikh Mohammed commented that new schemes will be welcomed by the market, which has slowed significantly during 2015. According to regional projects tracker MEED Projects, the value of construction and infrastructure contract awards in the UAE so far this year has dropped nearly 47 per cent to $11bn, from $21bn during the same period last year.
The total value of awards made during the whole of 2014 was $38bn, some 9.5 per cent lower than the $42bn awarded in 2008, when the market was at its peak.
Awards on major deals are needed if the value of contracts let in 2015 is to improve. One of the largest projects that could be awarded is the second phase of the Etihad Railway. Sheikh Mohammeds comments on the scheme reinforce the market expectation that the phase will move ahead this year. The construction contracts were retendered in early June and sources close to the project say the scheme is now a priority for the government.
Etihad Rail has invited contracting consortiums to submit technical bids for the reduced second phase by 16 July, with commercial offers due on 30 July. The national rail company had been locked in protracted negotiations with two shortlisted groups for the phase for more than a year. Bids were submitted in November 2012.
GCC Projects Market Report 2015
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The outlook for the projects market in the GCC is uncertain. Oil prices have fallen by half since June 2014, putting increased pressure on government finances. This has led to a review of spending priorities across all the GCC markets.
As a consequence there is huge uncertainty for any businesses operating in the regional projects market.
MEEDs GCC Projects Market Report 2015 provides clarity on the outlook for projects and helps you to understand the drivers of projects spending activity in each of the GCC markets.
The report provides a comprehensive snapshot of the GCC projects market, helping you position your company for the upcoming opportunities and mitigating risk and challenges in the coming months.
GCC Projects Market Report 2015 provides:
- Future Project Forecast: Identify key opportunities across all sectors by gaining an understanding of future project spend
- Top Contractor and Client Activity Review: Increase your market share by gaining insight into the industry leaders by sector and their current and planned project activity
- Market and sector-based executive summaries: Plan your business development strategy by gaining an immediate insight on the market
- Government Policy and Strategic Priority: Mitigate risk and identify challenges by understanding the major drivers behind the plans
The report focuses on quantifying the size of the market and the individual sectors that comprise it, as well as supplying a forecast for the future direction of the market. It also looks at the recent changes in government in Saudi Arabia and considers how the increased security concerns will shape government spending priorities.
Stay up-to- date with regional trends and access exclusive data, research and analysis in presentation-ready tables, graphs, charts and maps.