Navigating Construction and Investment in the New Decade
The UAE, aligned with the “We the UAE 2031” vision, is setting the stage to double its GDP within the coming years. Central to this ambitious blueprint is the strategy to bolster its tourist numbers to over 40 million within the coming decade.
However, with grand ambitions come intricate challenges. Currie & Brown’s latest United Arab Emirates Construction market overview report examines this ambition for tourism growth. The surge in tourism means an increased demand for infrastructural expansions, particularly in the realms of hotels, visitor attractions, and transportation amenities. Addressing these needs will undoubtedly elevate the demand for materials, products, and skilled labor. It is here that a potential bottleneck emerges.
The current labor market in the tourism and transport infrastructure sector is struggling to meet the demands, with requirements overshadowing supply. This shortage becomes even more palpable with Saudi Arabia further intensifying the competition for skilled labor. Delays in projects are almost a foregone conclusion if this issue is not addressed promptly. Cost implications are another concern that could drastically impact project budgets, questioning their overall viability.
Our recent report sheds light on these concerns. It underscores the indispensability of stringent project management, the benefits of technology integration in construction, and the urgency of industry-wide collaborations for training initiatives. Such proactive measures will be pivotal in crafting efficient built environments that reciprocate value to every stakeholder. Additionally, a harmonized approach, balancing social, economic, and environmental facets, will not only cater to the nation's needs but also bolster its appeal for international investments and expertise.
Public-Private Partnerships (PPPs) are anticipated to be the vehicles driving this transformation. While traditionally limited to sectors like power and water, the forthcoming era will likely witness PPPs permeating education, transport infrastructure, and healthcare.
Taking a glance at the demographic landscape, the UAE’s population is projected to burgeon from 10 million to nearly 11 million by 2028. This upswing will engender a compounded demand in healthcare, education, and essential utilities like water and energy. And underpinning all these developments is a foundational commitment to sustainability.
The lessons from the COVID-19 pandemic further emphasize the need for unique resource protection measures. Embracing strategies such as flexible pricing structures, adept risk allocation, and quicker payment terms can offer a protective shield to both contractors and the broader supply chain. Lastly, looking beyond borders can be beneficial. By establishing connections with educational institutions worldwide and showcasing the opportunities that the UAE presents, there's a significant potential to attract and integrate global talent into local projects.
The forthcoming years will be marked by flux, with rising interest rates and construction costs due to global inflation. Comprehensive early-stage cost management will be the guiding compass for clients navigating this uncertain economic horizon. The UAE, with its resilient vision, is poised not just to adapt but to thrive in this evolving tapestry.