UAE Construction Market - Growth, Trends, COVID-19 Impact, and Forecasts (2021 - 2026)

The UAE Construction Market is segmented by Sector into Commercial Constructions, Residential Constructions, Industrial Constructions, Infrastructure (Transportation) Constructions, and Energy and Utility Constructions.

Market Snapshot

UAE Construction Market CAGR
Study Period:

2017- 2026

Base Year:

2020

CAGR:

4.69 %

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Market Overview

The UAE construction market was valued at USD 101.45 billion in 2020, and it is expected to reach a value of USD 133.53 billion by 2026, registering a CAGR of 4.69% over the period of 2021-2026.

The construction market crisis in Dubai has been impacted by the COVID-19, which led to the halt of construction work. This, in turn, has led to a reduction in net profits in the sector.

The government of the country is also focusing on smart cities and at a similar front plan to digitize up to 1000 government services and install 2000 wi-fi hotspots in the country. Moreover, liberal trade policies in the country are attracting foreign investors, propelling the construction market in the UAE.

The construction sector is the essence of the UAE economy, and it is very encouraging to see that the industry is expecting rapid growth in the coming years. The construction industry plays an important role in the economic uplift and development of the country.

Scope of the Report

The construction market includes a wide range activity that covers upcoming, ongoing, and growing construction projects in different sectors, which include but not limited to geotechnical (underground structures) and superstructures in residential, commercial, and industrial structures as well as infrastructure construction (like roads, railways, and airports) and power generation and transmission related infrastructure.

The report offers a complete background analysis of the construction industry, including an assessment and contribution of the sector in the economy, market overview, market size estimation for key segments, emerging trends in the market segments, market dynamics, etc. The report also covers the impact of COVID-19 on the market.

The market is segmented by sector: commercial construction, residential construction, industrial construction, infrastructure (transportation) construction, and energy and utility construction.

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Key Market Trends

Tourism Construction in Dubai to Boost the Construction Sector

The UAE construction market is expected to grow at a brisk rate during the forecast period on account of upcoming events in the UAE, i.e., Expo 2020 (originally scheduled for 20 October 2020 – 10 April 2021. However, due to the COVID-19 pandemic in the United Arab Emirates, the new dates are 1 October 2021 – 31 March 2022) and increasing inclination of government to boost tourism in the country.

Construction demand in Dubai continues to be strong in the run-up to Expo 2020, supported by new tourism and hospitality projects and public spending on infrastructure, although rising materials costs and funding constraints are exerting pressure on profit margins.

Countries with the most projects in the construction pipeline in the hotel segment are Saudi Arabia with 186 projects/66,866 rooms and the United Arab Emirates with 161 projects/45,753 rooms.

UAE Construction Market - 1

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Construction Projects in Pipeline to Boost the Market

The outlook looks promising as the government continues with its infrastructure plans, given various government initiatives such as the Energy Strategy 2050, the Sheikh Zayed Housing Programme, and the Dubai Tourism Strategy.

Infrastructure projects are a key part of the UAE's economic expansion, as not only the emirate but the overall Gulf Cooperation Council (GCC) region still has huge infrastructure needs, as it seeks to build efficient transport and logistics networks as well as reliable supplies of clean energy.

Also, Israel and the UAE have reached a historic deal to normalize ties opening up investment opportunities. The countries agreed to develop a joint strategy to boost cooperation in the energy sector. Abu Dhabi aims to sustain long-term growth. In the long-term, investments in Abu Dhabi's commercial building sector will help to offset an expected decline following the conclusion of Expo 2020. Abu Dhabi's share of the pipeline is estimated to grow in the coming years, as the government prioritizes efforts to expand the emirate's economic base beyond oil. Abu Dhabi's ambitions in the commercial infrastructure space, its government aims to attract 7.9 million tourists annually by 2030 under the auspices of its Abu Dhabi 2030 Plan. Furthermore, the emirate hopes to expand its retail and office space to 4 million and 7.5 million square meters by 2030.

The UAE has about half of the pipeline value of Saudi Arabia with about USD 288 billion of planned projects. An additional concern for the UAE construction is that the USD 125 billion of future projects in the UAE is low compared to the USD 145 billion of projects in execution, suggesting a shrinking market.

UAE Construction Market 2

Competitive Landscape

The UAE construction market is highly competitive, with the presence of major international players. The UAE construction market presents opportunities for growth during the forecast period, which is expected to further drive market competition. With a few players holding a significant share, the market studied has an observable level of consolidation.

Recent Developments

October 2020: The approval of a new Dubai Building Code was a positive development; the new code outlines a revised set of construction rules and standards and seeks to reduce construction costs by streamlining building rules.

August 2020: The UAE announced in August 2020 that it would deliver a three-stage 'flexible package' of measures to strengthen the economy, including steps to support the labor market and support investment.

Table of Contents

  1. 1. INTRODUCTION

    1. 1.1 Scope of the Market

    2. 1.2 Market Definition

    3. 1.3 Executive Summary

  2. 2. RESEARCH METHODOLOGY

    1. 2.1 Study Deliverables

    2. 2.2 Study Assumptions

    3. 2.3 Analysis Methodology

    4. 2.4 Research Phases

  3. 3. MARKET INSIGHTS

    1. 3.1 Current Economic and Construction Market Scenario

    2. 3.2 Technological Innovations in the Construction Sector

    3. 3.3 Impact of Government Regulations and Initiatives on the Industry

    4. 3.4 Mapping of Industrial Clusters and SEZs and a Brief Analysis of Investment Opportunity

    5. 3.5 Review and Commentary on the Extent of UAE's Economy Diversification

    6. 3.6 Comparison of Key Industry Metrics of the UAE with Other GCC Member Countries (Analyst View)

    7. 3.7 Construction Cost Metrics of the UAE with Other GCC Member Countries (Analyst View)

    8. 3.8 Impact of COVID-19 on the Construction Sector

  4. 4. MARKET DYNAMICS

    1. 4.1 Drivers

    2. 4.2 Restraints

    3. 4.3 Opportunities

    4. 4.4 Porter's Five Forces Analysis

    5. 4.5 Industry Value Chain Analysis

  5. 5. MARKET SEGMENTATION AND ANALYSIS - BY SECTOR

    1. 5.1 Commercial Construction

    2. 5.2 Residential Construction

    3. 5.3 Industrial Construction

    4. 5.4 Infrastructure (Transportation) Construction

    5. 5.5 Energy and Utility Constructions

  6. 6. COMPETITIVE LANDSCAPE

    1. 6.1 Market Concentration Overview

    2. 6.2 Strategies Adopted by Major Players

    3. 6.3 COMPANY PROFILES

      1. 6.3.1 AE Arma-Electropanc

      2. 6.3.2 Aegion Corp.

      3. 6.3.3 Bechtel

      4. 6.3.4 CB&I LLC

      5. 6.3.5 Consolidated Contractors Group

      6. 6.3.6 Fluor Corp.

      7. 6.3.7 Jacobs

      8. 6.3.8 Al Futtaim Carillion

      9. 6.3.9 Joannou And Paraskevaides Limited (JP)

      10. 6.3.10 ACC Arabian Construction Company

      11. 6.3.11 Arabtec Constructions - LLC

      12. 6.3.12 Abu Dhabi National Energy Co. PJSC

      13. 6.3.13 Emirtec

      14. 6.3.14 Sobha Engineering & Contracting LLC*

    4. *List Not Exhaustive
  7. 7. INVESTMENT ANALYSIS

  8. 8. MAJOR INFRASTRUCTURE DEVELOPMENT PROJECTS (PROJECT DESCRIPTION, VALUE, LOCATION, SECTOR, AND CONTRACTORS)

    1. 8.1 Existing Infrastructure

    2. 8.2 On-going Projects

    3. 8.3 Upcoming Projects

  9. 9. FUTURE OF THE CONSTRUCTION SECTOR IN THE UAE

  10. 10. APPENDIX

  11. 11. DISCLAIMER

**Subject to Availability

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Frequently Asked Questions

The UAE Construction Market market is studied from 2017 - 2026.

The UAE Construction Market is growing at a CAGR of 4.69% over the next 5 years.

The UAE Construction Market is valued at 101 Billion USD in 2017.

The UAE Construction Market is valued at 133 Billion USD in 2026.

  • AE Arma-Electropanc
  • Aegion Corp.
  • Bechtel
  • CB&I LLC
  • Consolidated Contractors Group

Are the major companies operating in UAE Construction Market.

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