Construction costs have risen by around 30 per cent

Shortfall in skilled construction workers set to hit the Gulf

Dubai, UAE, 19 February 2008: With the Gulf construction sector showing no sign of slow-down, contractors and developers are finding it increasingly challenging to recruit and retain staff. Construction costs in the Gulf have risen by around 30 per cent in the past 12 months and new companies are entering regional markets, making the sector even more competitive. MEED - the business information specialist and conference organiser - will be holding the Construction Skills and Labour Resource Management conference on 11-12 March 2008 at the Shangri-La Hotel, Dubai to discuss new approaches to resourcing projects and future means of tackling the issue of unskilled labourers.

Rising costs remain the key issue for contractors in 2008 but, unlike in previous years, it is the rising price and dwindling supply of manpower, not materials, that is causing concern. With one million labour cards issued in the UAE in 2007 alone, there has previously been no shortage of construction workers in the UAE. However, Dubai contractors increased worker's wages by 20 per cent following a strike in November 2007 by the emirate's largest contractor, Arabtec Construction.

More than 300,000 labourers declared their illegal status during the three-month amnesty impacting on the entire UAE construction industry as even companies that did not employ illegal workers often relied on subcontractors that did. There has subsequently been a shortfall in competent workers.

In addition, there is competition from the laborers' home countries. The fall in value of the GCC currencies, due to their US$ pegging, has significantly reduced the attractiveness of the region to labour from the Indian subcontinent. Increasing numbers of projects in Asia are competing for traditional sources of skilled staff in Europe, Australia and USA; the Indian government is expected to spend US$500 billion on infrastructure in the next five years. Similarly, in the Gulf, Abu Dhabi has launched US$140 billion worth of real estate projects since 2005 and Doha and regional giant Saudi Arabia are also at early stages of the development cycle.

Edmund O'Sullivan, Chairman, MEED Events said:

"In order to overcome skills shortages and ensure sufficient resourcing, contractors are looking at new solutions like joint ventures to secure long term work and skills bases. Delays caused by lack of resources mean massive extra costs for contractors and developers and as labour costs rise, developers will be forced to resort to more sensible working hours for construction workers in order to cut costs.

"The Construction Skills and Labour Resource Management conference will look to discuss the increasingly pressing labour issue in the Gulf including the conditions in which construction workers work and live, their salary, recruitment of skilled international staff in the future and the long-term effects of high labour demand on productivity."

Rod Stewart, Regional Managing Director, Hyder Consulting Middle East said:

"We all recognise that we are in a severely labour constrained construction market. We run a severe risk of continuing to ignore the problem and expecting everything to sort itself out.  In reality we need to introduce some fresh thinking into our recruitment and retention processes, as well as adopting some new approaches to overcome the continuing shortages. A combination of better programming, more training, more packaging of work, and more realistic targets in the first place would all help. This conference will explore all these and several other factors, I am sure."

Leading figures from each sector will be addressing the most critical sector issues including David Savage, Managing Director, Al Habtoor Engineering Enterprises; Yaqoob al Zarooni, Chief Officer Human Resources, Dubai Properties; Stuart Wallace, Managing Director, Parsons Brinckerhoff Middle East; Mark Prior, Regional Managing Director, EC Harris International; Robert Lee, Executive Director, Nakheel PJSC; and Jim Metcalfe, President & CEO, Cansult Maunsell/ AECOM.

Delegates for MEED's Construction Skills and Labour Resource Management conference 2008 are also able to take advantage of a pre-conference workshop on obtaining visas in GCC markets for non-nationals.

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.  More information about the Construction Skills and Labour Resource Management conference 2008 - including latest news, pre-conference workshop and full conference details, can be found at www.meed.com/skills.

To reserve places at the conference, call the MEED customer services team on +9714 390 0699 or email conferences@meed-dubai.com.

-Ends-

About MEED
MEED is internationally recognised as providing essential business intelligence for anyone doing business in, or with, the Middle East and North Africa. With journalists and contacts across the entire Middle East and North Africa region, MEED provides reliable, up-to-date business news, analysis and data in both print and online. MEED attracts customers from across 78 countries worldwide.

www.meed.com

www.meedprojects.com  

For additional information or for media attendance, please contact:
Vicky Westwood or Mustafa Al-Sheikhly at Four Communications
Telephone: +971 4362 5129 / M. +971 55 985 3377
Email: meed@fourcommunications.com

© Press Release 2008