UAE – Mubasher: The construction industry in the emirates of Abu Dhabi and Dubai has seen variety in terms of material price movement in the first quarter of 2019, according to a recent report by Colliers International MENA.
Prices of steel rebar in the UAE’s two biggest emirates have changed drastically and dropped by 9% year-on-year in Q1-19 in line with the downward trend of steel pricing in the Middle East, the report said.
In the three-month period ended 31 March 2019, the cost of construction edged up by 0.8% on average as compared to the same quarter of 2018, Colliers International MENA indicated.
The construction industry in the two GCC cities currently witness a slowdown, which is expected to carry on throughout 2019 “as property developers balance their portfolio against tighter demand,” the report added.
However, related workload to Expo 2020 Dubai will not make a remarkable impact on the cost of construction, the commercial real estate services projected.
Abu Dhabi and Dubai are likely to maintain spending on physical and social infrastructure in order to meet the demand for both population growth and growing tourism.
Furthermore, Colliers highlighted that investments such as the Sheikh Zayed Housing programme, Al Maktoum Airport, Dubai Creek Harbour, Jubail Island, road and metro projects and others will help reduce the impact of the downturn on the industry.
“Strong competition will continue due to reduced spending and demand, thereby forcing downward pressure on construction company margins,” according to the report.
Moreover, Inflation Outlook Colliers International MENA forecast that construction cost inflation for Abu Dhabi and Dubai will not surpass 1% over the next 12 months.
