Construction sector in UAE expected to flourish after 2020
Dubai will continue to remain a construction and development hub for years to come
The UAE government has launched new initiatives after Expo 2020, by including higher oil prices and improving investor confidence in the economy.
In the next 5 years, according to the largest market research store based in Dublin, Research and market, investments in the UAE construction industry will raise due to economy diversification.
The industry, which recovered last year following two years of contraction, is expected to rise at a compound annual growth rate of 4.64 per cent during 2019-23 as against 1.08 per cent in 2014-18 period. It is expected to hit $101.2 billion by 2023 from $80.7 billion in 2018 due to recovery in crude oil prices, a rise in non-oil product exports and a decrease in the fiscal deficit. It registered a growth of 4.2 per cent last year.
The construction industry has a promising outlook due to several factors:
- The current oil price around 70$ will boost investments into the economy
- Mega projects announced by His Highness Sheikh Mohammed bin Rashid Al Maktoum will guarantee ongoing construction works
“The UAE is set to see an increase in the number of projects during 2019-2020 and we expect the country to remain in top position,” said Pinsent Masons’ head of Middle East Region Sachin Kerur.
Dubai’s hospitality sector is also building on forecasted demand ahead of 2020.
This includes Nakheel’s PALM360 project, where a Raffles hotel will include the world’s largest sky pool.
The infrastructure spending in preparation for Expo 2020 Dubai serves as a catalyst, boosting investor confidence," a spokesperson of Emaar Properties said.
"With a positive shift in sentiment on the back of recovering oil prices, economic diversification, strong liquidity in Abu Dhabi and the long-term health of our real estate market, we are optimistic about the year ahead," said Maan Al Awlaqi, executive director - Commercial at Aldar Properties.