JobXDubai

Despite facing challenges from harsh weather, skills shortages, and escalating material costs, the UAE construction sector remains resilient, according to the Royal Institution of Chartered Surveyors (RICS) Global Construction Monitor Q1 2024.

Residential Construction Leads the Way

In terms of construction types, residential construction captured the highest share of the UAE’s construction market last year. This quarter, construction activity recorded a strong +53 per cent, unchanged from the last period.

Sector Performance

All sectors continue to demonstrate solidly positive activity readings, with Private Residential posting its highest figure (+76 per cent) since the monitor began in Q3 2018. Current conditions show mixed signs, with profit margins rising and new business enquiries posting a strong figure this quarter (+57 per cent).

Challenges Abound

Material cost rises continued to hold back construction activity, recording a +61 per cent result. Respondents identified material costs as the second-highest factor holding back activity, while market competition was cited as the largest proportion of respondents (64 per cent).

Weather and Skills Shortages

Weather is increasingly blamed for project delays in the UAE as Summer approaches in the northern hemisphere. Skills and labour shortages persist, with Quantity Surveyors and unskilled labour experiencing shortages.

Regional Competition

Competition for skills and materials from neighbouring Saudi Arabia, which is experiencing a construction boom, adds to the challenges faced by the UAE construction sector.

Positive Outlook

Despite these challenges, the UAE’s construction sector remains in a strong state across the board, and appears likely to continue on an upward trajectory for the foreseeable future.