Construction activity in the UAE remains vibrant, driven by a continuous surge in real estate developments nationwide. The latest RICS Global Construction Monitor shows the UAE’s construction sector has experienced a robust 54 percent increase in activity, reflecting a positive outlook for ongoing building projects.
Saudi Arabia leads the region with a Construction Activity Index (CAI) of +64, although this is a slight decrease from the previous quarter’s +72. Both Mauritius and the UAE are witnessing strong construction growth, with their CAI figures rising to +57 and +54 respectively this quarter. The Royal Institute of Chartered Surveyors' second-quarter survey indicates that post-pandemic, cross-sector growth is expected to persist.
“Skills shortages and rising resource costs remain challenges, but all metrics point to a resilient sector poised for continued growth,” noted Simon Rubinsohn, RICS chief economist. He highlighted strong workload indicators in the Middle East and India, contrasting with minimal signs of recovery in China and Hong Kong, and ongoing issues in Qatar post-World Cup.
The RICS report reveals that growth spans both private and public sectors, with residential, non-residential, and public projects showing increases of 58 percent, 38 percent, and 59 percent respectively. Despite these positive trends, the UAE faces typical challenges of skilled labor shortages and escalating building material costs, with competition from Saudi Arabia intensifying these issues.
Weather conditions are also cited as a significant factor affecting construction, particularly during the summer months. Overall, the UAE’s construction sector shows no major changes from the previous quarter, with consistent growth expected to continue. Skills shortages and rising costs are ongoing concerns, yet the sector’s resilience is evident.
In the Middle East and Africa, construction activity aligns with recent trends, with strong sector performance and future growth expectations. Financial constraints and inflationary pressures, however, continue to pose challenges. The MEA region’s CAI stands at +24 for Q2, maintaining an expansionary stance despite a slight decline from Q1’s +26.
Oman, Nigeria, and South Africa show positive CAI readings, with South Africa notably improving from -2 to +11. In contrast, Bahrain and Qatar report negative CAI figures, with Qatar’s construction market continuing its prolonged contraction post-World Cup.
