UAE saw $20bn worth of developments suspended or cancelled in last year, $604bn worth of projects are still planned or underway, but that is a decline of 33 percent on the year-earlier period. Understandable with the ‘Arab Spring’ and the fall out from the economic global recession. High debts around the world are drying up finance. As US forces leave Iraq there is a knock on effect to local supply chains etc.
More recently, a slowdown in Abu Dhabi’s construction market has alarmed the industry, which fears a reduction in spending in the oil-rich emirate could crimp any fledgling recovery in Dubai. The UAE capital has pushed back the delivery of major projects including its planned Louvre and Guggenheim museums, in a sign it may be feeling the pinch of its $500bn ‘2030’ plan.
Across the main MENA markets,an average of 65 percent of projects were delayed and 35 percent cancelled. Saudi Arabia and Iraq replace the UAE as the region’s dominate construction market. Saudi, has an ambitious $130bn state spending plan in part to overhaul the country’s affordable housing market,and has $648bn worth of projects in the pipeline a 90 percent increase on 2010.
Iraq, which is struggling to rebuild its infrastructure awarded almost $17bn of projects in 2011, up from $10bn last year. The country has $356bn worth of projects planned, the report said.
The building boom expected in Qatar to host the 2022 World Cup has yet to materialise into projects on the ground, The gas-rich country has cancelled $7bn worth of projects in the last 12 months,
Kuwait has faced ongoing political issues which have stalled spending plans
A review of construction firms showed Asian companies continued to dominate contract wins, with Samsung and Hyundai bidding for the biggest share of projects in the pipeline.
Individual companies will undoubtedly suffer and the overall market will feel the knock on effects. However the previous pace of change brought more than its share of problems with inflation, traffic disruption etc. A more modest sustainable rate of growth as the market matures may be a blessing in disguise. Whether all of those projects could have been financed and resourced with staff and euipment without disrupting the economy is debatable.
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