- Overall construction demand down a touch but still firmly positive
- Future still looking positive with solid twelve-month expectations
- Large infrastructure projects in Saudi Arabia and other neighbouring states create competition for workers and construction materials
- Construction Managers and Surveyors among most profound skills shortages
The Royal Institution of Chartered Surveyors (RICS) Global Construction Monitor Q1 2023 for the United Arab Emirates (UAE) reports that the UAE’s construction sector remained firmly positive going into 2023.
The top line Construction Activity Index (CAI) reported a net balance of +41 – down a touch from the +49 reported in the previous quarter, but otherwise stronger than any prior reading.
Workloads in the private residential sector contribute the most overall to the positive picture (+51 net balance), while infrastructure workloads report a net balance of +45, and private non-residential projects a +29 reading. Crucially, the entire sector continues to report firmly positive readings for construction activity.
Looking to the future, twelve-month expectations remain high across each segment, while the net balance for profit margins reports a strong +40.
Like the global construction sector in general, some of the most prominent factors holding back activity are material costs and skills shortages, along with general financial constraints. Comments from professionals in the UAE indicate concerns about the overall resource demands of the region, with large infrastructure projects in neighbouring states enticing workers out of the country. There are also some concerns about high temperatures and the prospect of it lengthening construction times and increasing costs over the summer months.
Overall, the UAE’s construction sector looks strong, and continues to demonstrate resilience as it weathers the storms shrouding the global economy and geopolitical instability.
