The Royal Institution of Chartered Surveyors (RICS) Global Construction Monitor Q1 2024 underscores the UAE’s construction sector’s unwavering resilience, even in the face of persistent skills shortages and escalating material costs.
Construction activity recorded a strong +53% this quarter, a figure unchanged from the last period. When looking at the types of construction projects, all sectors continue to demonstrate solidly positive activity readings, with Private Residential posting its highest figure (+76%) since the monitor began in Q3 2018.
Current conditions show mixed signs. Profit margins continue to rise according to net sentiment, recording a +13% this quarter. Meanwhile, New Business Enquiries posted another strong figure this quarter (+57%). However, according to respondents, material cost rises continued to hold back construction activity, recording a +61% result. Indeed, material costs are seen as the second-highest factor holding back activity as a proportion of respondents (62%), while the largest proportion identifies market competition as a factor stifling activity (64%). As expected, weather is increasingly blamed for project delays in the UAE as Summer approaches in the northern hemisphere.
There are also ongoing skills and labour shortages, and according to respondents, all skills and roles appear to be in demand. A majority (+57%) of respondents noted a shortage of Quantity Surveyors, whilst 23% identified a shortage of Building Surveyors. Unskilled labour is also experiencing shortages, where 21% identified it as an issue. Rising material costs and skills shortages are experienced by the global construction industry and are not unique to the UAE or the Middle East. Looking at comments from professionals in the country, some identify heavy competition for skills and materials from its regional neighbour, Saudi Arabia, which is experiencing a construction boom.
Overall, the UAE’s construction sector remains in a strong state across the board, and despite challenges, appears likely to continue on an upward trajectory for the foreseeable future.
