- Residential construction had the largest market share in the industry, followed by energy and utilities construction
- Government initiatives helping to boost industry overall
- CAGR of 4.6% expected between 2019 and 2023
Dublin-based Research and Market’s latest “Construction in the UAE – key trends and opportunities in 2023” report suggests that the UAE’s construction industry will see renewed growth and thrive post-Expo 2020 as new government initiatives, higher oil prices and improving investor confidence in the economy take effect.
The report states that the construction industry recovered last year after nearly two years of contraction, and is expected to rise at a compound annual growth rate (CAGR) of 4.6% between 2019 and 2023. It is expected to earn US$101.2 billion by 2023, up from $80.7 billion in 2018, largely due to a recovery in crude oil prices, and partly due to a rise in non-oil product exports and a decrease in the fiscal deficit. With new investments in residential, energy and utilities, infrastructure and commercial construction projects, construction will receive a significant boost over the coming years. These include various government initiatives, such as the Ministry of Education Strategic Plan 2017-21, National Strategy for Higher Education 2030 and Education 2020 Strategy, the Energy Strategy 2050, the Sheikh Zayed Housing Programme and the Dubai Tourism Strategy.
Research and Market also noted that residential construction had the largest market share in the UAE’s construction industry between 2014 and 2018, accounting for 33.1% of the industry’s total value in 2018. The trend is expected to continue as government efforts to balance housing demand and supply through the construction of housing units takes shape over the next five years.
The energy and utilities construction sector was the second-largest contributor between 2014 and 2018, accounting for 26.7% of the industry’s total value in 2018. With government plans to invest AED 600 billion in renewable energy by 2050, this segment is expected to continue to grow. Initiatives such as Ghadan 21, Adnoc’s petrochemical city and sustained foreign direct investment FDI into Khalifa Industrial Zone Abu Dhabi (KIZAD) will also positively impact the sector.
Cavendish Maxwell is the MENA region’s leading firm of property consultants and chartered surveyors. If you are looking for professional real estate consultation or advice on property related matters, please view our services.