After two years of contraction, the construction companies in the UAE recovered in 2018 and recorded real growth of 4.2%. As a result, the industry's production value, measured in terms of constant US dollar exchange rates in 2017, increased from $77.4 billion in 2017 to $80.7 billion in 2018; this growth was driven by the recovery of crude oil prices, an increase in exports of non-oil products and a reduction in the budget deficit.
In addition, an increase in crude oil production and the government's efforts to diversify the economy are expected to boost investment in the UAE construction industry over the forecast period.
The industry's real production value is expected to increase at a compound annual growth rate (CAGR) of 4.64% over the forecast period, compared to 1.08% over the period under review (2014-2018). Investments in projects for the development of transport, energy and social infrastructure under various programs will support the expansion of the industry over the forecast period. Notable examples include the Ministry of Education's Strategic Plan 2017-2021, the National Strategy for Higher Education 2030 and the Education 2020 Strategy, the Energy Strategy 2050, the Sheikh Zayed Housing Program and the Dubai Tourism Strategy. As a result, the industry is expected to grow from a value of $80.7 billion in 2018 to $101.2 billion in 2023, based on constant U.S. dollar exchange rates in 2017.
Residential construction was the largest market in the UAE construction industry during the reporting period, accounting for 33.1% of the industry's total value in 2018. The market is expected to maintain its position over the forecast period, with residential construction accounting for 33.1% of the industry's total value in 2023. Moreover, this market production is expected to be supported by the government's efforts to balance housing supply and demand through the construction of housing units.
The construction of energy and utilities was the second largest market in the UAE's construction industry during the reporting period, accounting for 26.7% of the industry's total value in 2018. This market is expected to follow a similar trend over the forecast period, with the construction of energy and utility facilities accounting for 26.3% of the industry's total value in 2023. This sector would also be supported by the government's plan to invest AED 600.0 billion (USD 163.0 billion) in the development of renewable energy projects in the country by 2050.
The report Construction in the UAE - Key Trends and Opportunities to 2023 provides detailed market analysis, information and insights into the UAE construction industry, including -
Growth prospects for the construction industry in the UAE by market, project type and construction activity
Critical insight into the effects of industry trends and problems as well as an analysis of the most important risks and opportunities in the construction industry in the UAE
This report contains a comprehensive analysis of the construction industry in the UAE.
Historical (2014-2018) and projected (2019-2023) assessments of the UAE construction industry, with details of the key growth drivers.
Analysis of the pipeline of megaprojects, including a breakdown by stage of development in all sectors and planned expenditures for projects in the existing pipeline
Listing of megaprojects, in addition to information on leading contractors and consultants.
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