It has been a difficult 12 months for the UAE projects market. Previously viewed as a stable market relatively immune to the oil price, it posted a substantial fall in total project awards in 2019 to just over $31bn from $48bn the previous year.
The UAE projects market has had a more difficult first half of 2020 than its neighbours with contract awards down more than a third on the same period last year. As with neighbouring markets Covid-19 has been a factor but it has masked the fact that the market was already in sharp decline thanks to oversupply in its real estate sector.
The issue is compounded by the federation’s exposure to the global tourism shutdown and a decrease in aviation and retail spending. Despite a series of government announcements and initiatives to stimulate the economy, it is clear that it will be sometime before the market can return to its pre-2015 levels.
In the absence of a vibrant property sector, contractors and consultants will increasingly look to the government infrastructure sector as a source of new project opportunities. Water, power, road and other transport infrastructure will take on a greater significance as companies seek to win a smaller pool of new business opportunities.
Many project companies active in the federation have reacted by lowering margins in the face of increased competition or by focusing on other countries, particularly Saudi Arabia. Others have downsized to cut costs or left the market altogether.
In this challenging environment firms will have to be smart in order to prosper. Selecting the right clients, specialising in niche sectors, and introducing novel technologies are all tools companies can harness in order to stay ahead of the competition.
It is not all doom and gloom, however. Some sectors, specially water and renewable energy, are growing. Oil and gas spending in Abu Dhabi is also forecast to increase over the coming year.
Likewise, the pipeline of projects in the UAE sits at more than $670bn. Although there are undoubtable challenges in the short term, the long term prognosis is still relatively healthy. Regardless of what happens, the UAE market will remain one of the largest projects markets in the region.
The UAE Projects H2 2020 is the update to this year’s H1 report. Focused on data, it is aimed at helping companies create strategies for targeting and growing the market. It uses almost exclusively data from MEED Projects, the region’s leading online projects tracking service. With 15,000 active projects tracked and more than 35,000 in total in the database, MEED Projects makes it possible to quantify current, historical and future trends in the projects market in the region.
This analysis module will cover:
- Opportunities and challenges in the UAE’s projects market
- Analysis of the pipeline of planned projects and contract awards
- Key policies and drivers shaping the outlook for projects in the UAE
- Political and economic background
- The barriers and challenges that may arise
- Sector-by-sector breakdown of future project plans
- Key drivers of projects in each sector
- The UAE’s most valuable key projects and major project sponsors