BMI View: We have revised our construction industry forecast upwards for the UAE , as opportunities in the market continue to proliferate. Abu Dhabi and Dubai will remain the focal point of investment flows, with their transport, energy and tourism sectors driving robust industry growth over our 10-year forecast period between 2016 and 2025.
Forecast & Industry Developments
Following an upward revision to our forecasts, we are not project the industry to expand by 5.2% in real terms between 2016 and 2025, from 4.7% previously. We note that the high number of projects yet to enter construction and Abu Dhabi's increasing focus on non-oil sectors will sustain growth through our 10-year forecast period, even as a large number big-ticket projects relating to the World Expo 2020 begin to reach completion end-2019.
We continue to anticipate the highest growth over our forecast period will come between 2016 and 2019, averaging 7.0% real growth, as Dubai's preparation for World Expo 2020 is driving significant momentum into commercial building and transport infrastructure.
Nominal industry value is expected to rise from an estimated USD40.3bn in 2015 to USD89bn in 2025, keeping the UAE as one of the larger construction markets in the Middle East.
|f = BMI forecast. Source: BMI|
|Construction industry value, AEDbn||162.18||181.32||198.73||217.01||229.60|
|Construction Industry Value, Real Growth, % y-o-y||6.61||8.70||6.50||6.20||2.80|
|Construction Industry Value, % of GDP||11.3||12.0||12.5||12.9||12.9|
The UAE remains in fourth place out of 14 markets in our Infrastructure Risk/Reward Index (RRI) for the Middle East and North Africa region. Its score of 65.0 is well above the regional average of 52.5.
Sustaining the market's solid performance across the RRI indicators is robust construction industry growth forecast, well-developed financial market and its reputation as an attractiveness destination.
|Risk/Reward Index||Rewards||Industry Rewards||Country Rewards||Risks||Industry Risks||Country Risks|
|United Arab Emirates||65.0||65.6||70.0||57.3||63.8||60.0||66.3|
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.