• Construction Activity Index (CAI) remains positive despite several ongoing and emerging challenges
  • Subsector construction activity lowers, however, infrastructure proves most resilient
  • Material costs and labour shortages continue to stifle projects

The latest RICS Global Construction Monitor reveals that construction activity in the United Arab Emirates’ (UAE) remains positive overall, reporting a +23% result for the headline Construction Activity Index (CAI). However, this is notably down from the +53% recorded in the prior quarter, and the weakest result since Q2 2022.

In terms of the construction subsectors, private residential lowered notably from a very positive +63% reading in the previous quarter to -4% this time around. All subsectors softened while infrastructure proved most resilient, reporting a +48% result, which is down from +72% in the third quarter of 2023.

Respondents highlight that increased competition in the construction sector within the region, notably from Saudi Arabia, is influencing costs for accessing building materials and skilled labour to increase. Skills followed by general labour shortages are listed as the most influential factors for project delays (+69% and +68%, respectively). All types of labourers, including unskilled labourers, are in high demand, however skilled tradespeople are considered the scarcest (+73%), followed by construction managers (+59%).

Looking to the future, the UAE’s construction sector has proven somewhat resilient in the face of several regional and global headwinds affecting confidence, with infrastructure projects proving most resilient. Twelve-months expectations have also remained fairly resilient across the board, painting a picture of careful optimism going forward.

-Ends-

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