Is the UAE construction sector regaining confidence?

Is UAE construction back?

Since the Dubai debt crisis hit, UAE construction firms have faced multiple difficulties with many expanding into Kuwait, Oman and Libya in order to find work. However, this week saw the awarding of almost US$1 billion worth of construction projects to UAE-based companies, indicating that things may be looking up for the UAE construction sector and confidence is returning to the region's industries.

Among the projects awarded were a Dh500 million contract to Damac Properties for the construction of the Damac Heights residential project at Dubai Marina to Arabtec Holding and a Dh1.79 million deal between Saudi Tabreed Cooling Company and Saudi Aramco to build a central district cooling unit. A US$46 million contract from Aldar Properties was also awarded to Al Futtaim Carillion to build a new retail outlet for Ikea on Yas Island.

Investment in the oil projects

However, while there is definitely some signs of encouragement for the construction sector, there is a clean up turn in contracts being awarded in the region's oil and gas estate sectors. These include a $272 million deal for South Korea's Daewoo Engineering and Construction to build an oil storage facility for Abu Dhabi Oil Refining.

Speaking to Gulf News, an unnamed advisor to a 'prominent multinational bank' said, "Confidence is seeping back into the Gulf economies after good news from the US and Europe."

"Companies and investors are seeing the advantage in positioning themselves for a rapid return to health after GDP growth and a rise in consumer spending in the US and parts of Europe."

Damac Properties Chairman Hussain Sajwani concured saying, "When the recovery comes on, it will be most visibly felt in Dubai Marina and Business Bay," he told Gulf News. "That being the case, we have Ocean Heights making good headway towards completion, and Damac Heights will join it in good time."

After a rocky last six months, the emirate is essentially happy to see any form of spending. However once contracts being awarded to UAE firms become more and more frequent, the banks will follow suit and hopefully UAE financing will return to normal... in due time.

Relevant articles:

UAE construction firms expanding? | Is Dubai's construction sector recovering? | What has 2009 meant for MENA construction?

Timon Singh

Timon Singh is a graduate of Liverpool University where he received a degree in Social and Economic History. He has previously worked for BBC Magazines on BBC Who Do You Think You Are? Magazine, the publication for the popular genealogy show.

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