BMI View: Commercial construction and transport infrastructure will draw in significant investment over the first half of our forecast period, in the run up to the World Expo 2020. Dubai will continue as the outperformer, while Abu Dhabi's exposure to low oil prices continues to dent private investor sentiment. Government investment in the sector as a whole will remain robust.
Forecast & Industry Developments
The construction industry remains resilient in the face of low oil prices, with Dubai's planned projects in real estate and energy infrastructure progressing well. Abu Dhabi has been more exposed to the commodities downturn, given its economy's reliance on the sector, but still boasts the largest infrastructure investment programme in the UAE. We forecast 6.6% growth in 2016.
Growth will slow over the second half of our forecast period, as after 2020 there will not be sufficient projects under way to keep growth as robust. We forecast average annual growth of 3.2% between 2020-2025.
Big-ticket projects and underpinning our forecasts for robust growth over the short term include the USD32bn expansion project at Al Maktoum International Airport at Dubai World Central and the USD20bn nuclear power plant.
Significant real estate projects continue to move forward, a positive sign developers are willing to commit capital to projects.
|f = BMI forecast. Source: Source: UAE National Bureau of Statistics, BMI|
|Construction industry value, AEDbn||162.18||181.32||198.73||217.01||229.49|
|Construction Industry Value, Real Growth, % y-o-y||6.61||8.70||6.50||6.20||2.75|
|Construction Industry Value, % of GDP||11.3||12.0||12.4||12.8||12.8|
Risk / Reward Index
The UAE ranks fourth out of 14 countries in our MENA RRI Index, with a score of 65 out of 100.
The construction market is relatively large, second only to Saudi Arabia in a regional context. Fixed investment from the government and the private sector remains robust.
The market is friendly to foreign contractors and has no significant barriers to entry. However, foreign firms need to be represented by a local partner, and the rules and laws surrounding this are sometimes contradictory and vague.
|Risk/Reward Index||Rewards||Industry Rewards||Country Rewards||Risks||Industry Risks||Country Risks|
The United Arab Emirates Infrastructure Report features BMI Research's market assessment and forecasts covering public procurement and spending on all major infrastructure and construction projects, including transportation and logistics by land, sea and air; power plants and utilities, and commercial construction and property development. The report analyses the impact of regulatory changes and the macroeconomic outlook and features competitive intelligence on contractors and suppliers.
BMI's United Arab Emirates Infrastructure Report provides industry professionals and strategists, sector analysts, investors, trade associations and regulatory bodies with independent forecasts and competitive intelligence on the Emirati infrastructure and construction industry.
- Benchmark BMI's independent infrastructure industry forecasts for United Arab Emirates to test other views - a key input for successful budgetary and planning in the Emirati infrastructure market.
- Target business opportunities and risks in the Emirati infrastructure sector through our reviews of latest industry trends, regulatory changes and major deals, projects and investments in United Arab Emirates.
- Assess the activities, strategy and market position of your competitors, partners and clients via our Company Profiles (inc. SWOTs, KPIs and latest activity).
BMI Industry View
Summary of BMI’s key industry forecasts, views and trend analysis covering infrastructure and construction, regulatory changes, major investments and projects and significant national and multinational company developments. These are broken down into construction (social, commercial and residential), transport (roads, railways, ports, airports, etc), and energy & utilities (powerplants, pipelines and so on).
Industry SWOT Analysis
Analysis of the major strengths, weaknesses, opportunities and threats within the infrastructure and construction sectors and within the broader political, economic and business environment.
BMI Industry Forecasts
Historic data series (up to 2012) and forecasts to end-2024 for all key industry indicators, supported by explicit assumptions, plus analysis of key developments in the market and risks to the main forecasts. Indicators include:
Construction: Industry value (USDbn); contribution to GDP (%); total capital investment (USDbn); real growth (%).
Construction industry real growth forecasts (%) and industry value (USDbn) forecasts for industry sectors are split into Residential and Non-residential and Infrastructure sectors. Where the data is available for particular countries the infrastructure is further broken down into indicators for the transport subsectors of roads, railways, airports and ports and the energy and utilities sub-sectors of power plants and transmission grids, oil & gas pipelines and water infrastructure. This dataset is unique to the market.
The reports also include analysis of latest projects across the infrastructure sectors (transport, utilities, commercial construction).
BMI’s Infrastructure Risk Reward Index
BMI’s Risk Reward Index provides investors (construction companies, suppliers and partners) looking for opportunities in the region with a clear country-comparative assessment of a market’s risks and potential rewards. Each of the country markets are scored using a sophisticated model that includes more than 40 industry, economic and demographic data points. These provide indices of highest to lowest appeal to investors, with each position explained.
An assessment of the competitive landscape and key challenges to entering the market. Details of the largest companies active in the sector across the sub-segments of the industry, including the key financial figures from some of the largest players in the sector.
Examines the competitive positioning and short- to medium-term business strategies of key industry players. Strategy is examined within the context of BMI’s industry forecasts, our macroeconomic views and our understanding of the wider competitive landscape to generate company SWOT analyses. The latest financial and operating statistics and key company developments are also incorporated within the company profiles, enabling a full evaluation of recent company performance and future growth prospects.
The Infrastructure reports draw on an extensive network of primary sources, such as multilateral organisations, government departments, industry associations, chambers and company reports.
*Company profiles are not available for every country. Those reports instead contain information on the current activities of prominent companies operating in the market.