In its UAE special report published last week Middle East Economic Digest (MEED) asked me to provide an update on Dubai’s beleaguered construction sector. The findings of my research threw up some interesting contradictions. Contract awards had risen for the first time in over five years, and yet contractors remained pessimistic about the market prospects.
The first quarter of 2012 saw awards worth $1.57bn compared to $1.27bn in 2011. Data from MEED Projects showed that this was the first time awards had risen for over five years. However contractors said that it was too soon to use the word “recovery”. All of those interviewed as research for the article remained downbeat about margins, competition and market conditions. “Prices are still suicidal; those left standing are struggling to find work,” a senior UAE-based contractor told me. “Contractors are bidding below cost to try to create cash to pay salaries.”
Much of the growing activity in Dubai was driven by the hospitality sector along with transport investment. Hotels enjoyed a record year with over 9.1million guests in 2011 and hospitality firms and developers are looking to capitalise on the increasing popularity of the emirate as a destination for both tourism and business visitors.
For more read the full report here