MEED launches MEED Cost Indices (MCI), the UAE's first independent construction costs tracker and forecasting tool
Dubai, UAE: Construction costs in the UAE will fall in 2012 due to the unexpected slowdown in the country's projects market in 2011, a new report from construction industry cost tracker MEED Cost Indices (MCI) has revealed.
In the research report published on 30 January, MCI forecasts that construction costs in the UAE will fall by 1.3 per cent in 2012. The drop is the result of a fall in demand for construction materials due to a contraction in the UAE project market, which witnessed a 52 per cent slump in the value of contracts awarded in 2011 compared to 2010.
MCI predicts however that prices will rise again in 2013 as projects originally planned for 2011 are re-launched in 2012, confidence returns to the global economy and finance for projects becomes more readily available.
The report was published at the launch of MCI, the UAE's first independent tracker of construction costs.
MCI has been developed by Middle East business information service, MEED, following requests from construction companies, consultants and project developers for more reliable information on construction costs and trends. It provides an independent construction cost analysis and forecasting tool based on historical costs and forward-looking market projections.
The index provides companies involved in the construction and development of projects in the UAE with a five-year forecast of costs, enabling them to mitigate the risks of price volatility.
MCI's General Manager, Emil Rademeyer, said; "MEED Cost Indices' is an essential decision making reference tool for all key stakeholders associated with construction projects throughout the Middle East and is the latest example of MEED's expert knowledge of industry data and market research."
"The industry has been in need of an independent cost index for a number of years," said Rob Edgecombe, director of Rider Levett Bucknall, a leading international cost consultancy.
The rapid growth of the construction sector in the Middle East from 2002 to 2009 had a huge impact on the price of raw materials. MCI indicates that the cost of construction rose by 90 per cent from 2001 until its peak in early 2009.
But it shows that prices have fallen about 28 per cent since 2009 following the global financial crisis and the subsequent downturn in the UAE real estate market.
"The MCI data shows that construction costs in the UAE have fallen to similar levels to those seen in 2006, but will start to climb again next year," says MEED editor Richard Thompson. "So, the message to potential investors and developers of UAE projects is that 2012 is a good year to start building again."
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About MEED
MEED is the acknowledged market-leader in key regional industry-focused events and conferences; delivering expert, up-to-date business intelligence, industry data and research findings.
For further information contact:
Claire Stapley
Claire@sirenconsulting.com
050 4577841
© Press Release 2012
