Construction Costs Remain Stable in UAE 2016

Thursday, 18th August 2016

Ken Research, a leading market research and data analytics company,estimated that construction costs will remain stable in the UAE due to lack of cash availability, Trade Arabia reported.

The report added that construction projects were not suspended, despite current challenges, including the development of the world’s tallest twin towers, underwater hotel and a rainforest in the desert.

Demand for commercial, retail, residential, and hospitality developments is expected to increase in the future where the output value is expected to increase at a compound annual growth rate (CAGR) of 6.52% in 2016-2019, compared to a previous rate of 3.55% in 2010-2014.

Further, the report highlighted six mega-projects that are currently in the works, requiring investments at a cost of over AED 202.25 billion, according to Gulf Digital News.

The new projects will include the Dubai Metro expansion, Emirates Road, Etihad Railway, Dubai Airport expansion project, Abu Dhabi Metro, and Abu Dhabi Airport expansion.

Despite the UAE economy’s predominant reliance on Expo 2020 for growth and industry from 2015-2019, the UAE’s major drawback is the drop in oil prices, which is the largest source of revenue to the country.

Expo 2020 will demand a large scale of investments to fund the projects that will be displayed, particularly in transportation. which takes up to 13% of total UAE construction projects. To meet those investments, the government is trying to rely less on oil revenues by reducing its spending and subsidies.

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