UAE Contracts worth $45bn to be awarded in 2017

The UAE’s construction sector will witness growth of approximately 4% in 2017, compared to 2016 estimates, as work ramps up on projects connected to Expo 2020, Dubai Creek Harbour, and Dubai South. It is forecasted that contracts worth $45bn (AED165bn) will be awarded in the UAE during the course of next year.

In Q3 2016 UAE update of F&G, it is predicted a “small level of recovery” for the UAE’s construction market in 2017. However, it is also noted that declining global liquidity could lead to an extended timeline for some mixed-use projects in the Emirates.

Looking forward to 2017, they forecast a small level of recovery in construction awards as Expo 2020, Dubai Creek Harbour, and Dubai South developments are contracted and move to site.

“At this stage, approximately $45bn (AED165bn), 4% growth compared to 2016’s forecast is expected. However, this figure will still fall short of that required to support the industry at 2014/15 levels.”

“With global liquidity declining 8% from Q1 2015 to Q1 2016, a tightening in credit standards locally, and contracting real estate prices, there is a sizeable minority of mixed-use schemes in the UAE, which are now borderline feasible or unfeasible, that are likely to undergo reassessment.

The effect on the UAE’s pipeline of planned projects won’t be dramatic, but it will extend the delivery horizon of $860bn-plus (AED3.16tn-plus) of schemes from approximately 10 to 25 years.