UAE construction market hit $39.4 billion in 2012

Press Release   •   Feb 21, 2013 13:44 GMT

The United Arab Emirates (UAE) construction market is estimated to have reached a value of approximately $39.4 billion in 2012, driven by increased government spending on infrastructure development and economic growth.

The UAE construction sector is going through a phenomenal growth phase with a score of ongoing projects, investment into green open spaces, and the strong government support. Further, the country is witnessing massive investments in the construction industry from both public and private enterprises coupled with the increased foreign direct investment over the past few years.

A sector with increased presence in 2012 was kitchen and bathrooms, with the UAE market size for these materials in 2012 reaching nearly $1.2 billion, a 3.5% increase from 2010.

After winning accolades as one of the world's most eventful construction industries and witnessing a successful property boom up to 2009, the United Arab Emirates (UAE), the confederation of seven Emirates in the Gulf and one of the strongest nations in the Gulf Cooperation Council (GCC), witnessed a sharp tumble triggered by a debt mounting from leading construction companies which had invested heavily in building construction projects amid the boom and were unable to meet financial commitments.

Dubai led the downfall in the markets with property prices and rents crashing as much as 60 percent in 2010 followed by a hasty bailout by Abu Dhabi, the richest of the Emirates. A year later, as Dubai begins to recover on a fragile path of restarting projects shelved by it and restructuring to attract investments afresh, Abu Dhabi which had embarked on an equally ambitious plan under its Vision 2030 and looked like it will outpace Dubai on the global map, has also met a stumbling block.

Raising debt has caused the Emirate to tighten its purse strings and relook construction projects with a finer eye on the budget and spending, resulting in delays and cancellations on a large scale in government backed projects across the Emirate.

UAE's construction sector appears set to return to near-full capacity, with the government announcing it is reactivating a number of major development projects and stepping up spending on social infrastructure development.

In the first quarter of 2012, the Abu Dhabi and Dubai governments unveiled its revised construction programme, putting a number of formerly stalled projects on the top of its investment agenda, a move that will revive the spirits of the UAE's construction sector.

For more information on the UAE construction market, see the latest researc: UAE Construction Market

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