The region's construction sector saw a slump due to low liquidity and oil prices
Second quarter blues for the UAE, Saudi construction sector, report says
The construction sector in the UAE and Saudi Arabia slid in the second quarter amid a combination of summer holidays, slow-moving liquidity and low oil prices, according to project management firm Faithful+Gould.
The company, a division of Atkins, said that backlog work for the UAE construction market shrank by about US$17 billion last year. While in the first half of the year there was an improvement in awards throughout the UAE compared to the first half a year earlier, the value of projects planned or being delivered was flat. However, the firm said that as funding issues start to ease, new master plans will move through to construction.
David Clifton, Faithful+Gould’s regional development director, said that tender price pressure was still being exerted in the UAE despite market awards improving year-on-year. “We’ve already seen this year that major international players have withdrawn from the market and others have been caught out financially,” he said in the report. “There’s continued evidence of unsustainable low tender prices, which will no doubt require some future management through the supply chain.”
The study also said that Saudi Arabia awarded about $11bn in contracts in the first quarter, but has more than halved that figure this quarter.