The UAE’s construction sector has been indirectly affected by some of the social distancing measures that have been implemented to ‘flatten the curve’ of the spread of the coronavirus (COVID-19), says GlobalData, a leading data and analytics company.
Global economic activity has slowed sharply following the rapid spread of the virus. The pandemic has caused business closures, city curfews, travel bans, financial market upheavals and manufacturing shutdowns in major global economic hubs.
The impact of the virus has also been felt in the UAE, where precautionary measures have been implemented to combat the spread of the virus through social distancing.
Colin Foreman, Deputy Editor at GlobalData, comments: “In the construction sector, remote working, which some private sector employers in the UAE have voluntarily offered, could impact administrative procedures that are essential for site works to progress, such as sign-offs and schedule management.
“Meanwhile, even though cargo travel currently faces fewer restrictions than passenger flights, supply chain disruptions are likely to deepen in the weeks ahead. China – the world’s largest exporter and the epicentre of COVID-19 – has only just begun a slow recovery after its factories were shut down for almost two months to curb the spread of the virus.”
Procurement alternatives to Chinese suppliers, such as those in India, Singapore, Thailand and the US, are already being approached by construction companies in the UAE. However, as more countries suspend manufacturing and business operations to contain the virus, questions persist about whether these new supply markets will be in a position to fulfil their export commitments during the second and third quarters of this year.
Foreman continues: “So far, UAE authorities have managed to implement social activity suspensions without severely affecting economic output.”
In the near term, the UAE Central Bank’s AED100bn ($27bn) stimulus package for local banks and small- and medium-sized enterprises (SMEs) is also expected to benefit the local construction sector, the majority of which includes SMEs in the design, contracting and fit-out industries.
Foreman concludes: “It is not yet clear when the spread of COVID-19 will peak in the Middle East. This will largely determine the guidelines for social movement that health authorities implement over the next few weeks. For now, however, it is construction as usual in the UAE.”
Related Stories
Building Team | Jun 17, 2022
Data analytics in design and construction: from confusion to clarity and the data-driven future
Data helps virtual design and construction (VDC) teams predict project risks and navigate change, which is especially vital in today’s fluctuating construction environment.
Market Data | Jun 15, 2022
ABC’s construction backlog rises in May; contractor confidence falters
Associated Builders and Contractors reports today that its Construction Backlog Indicator increased to nine months in May from 8.8 months in April, according to an ABC member survey conducted May 17 to June 3. The reading is up one month from May 2021.
Market Data | May 18, 2022
Architecture Billings Index moderates slightly, remains strong
For the fifteenth consecutive month architecture firms reported increasing demand for design services in April, according to a new report today from The American Institute of Architects (AIA).
Market Data | May 12, 2022
Monthly construction input prices increase in April
Construction input prices increased 0.8% in April compared to the previous month, according to an Associated Builders and Contractors analysis of U.S. Bureau of Labor Statistics’ Producer Price Index data released today.
Market Data | May 10, 2022
Hybrid work could result in 20% less demand for office space
Global office demand could drop by between 10% and 20% as companies continue to develop policies around hybrid work arrangements, a Barclays analyst recently stated on CNBC.
Market Data | May 6, 2022
Nonresidential construction spending down 1% in March
National nonresidential construction spending was down 0.8% in March, according to an Associated Builders and Contractors analysis of data published today by the U.S. Census Bureau.
Market Data | Apr 29, 2022
Global forces push construction prices higher
Consigli’s latest forecast predicts high single-digit increases for this year.
Market Data | Apr 29, 2022
U.S. economy contracts, investment in structures down, says ABC
The U.S. economy contracted at a 1.4% annualized rate during the first quarter of 2022.
Market Data | Apr 20, 2022
Pace of demand for design services rapidly accelerates
Demand for design services in March expanded sharply from February according to a new report today from The American Institute of Architects (AIA).
Market Data | Apr 14, 2022
FMI 2022 construction spending forecast: 7% growth despite economic turmoil
Growth will be offset by inflation, supply chain snarls, a shortage of workers, project delays, and economic turmoil caused by international events such as the Russia-Ukraine war.