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Rays of recovery - UAE industry will see momentum in Q4
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10.7.2009 |
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Emirates Business 24/7 reported that a total of 213 building and infrastructure contracts valued at about AED 92.99 billion were awarded during the first Q3 of 2009.
According to statistics released by Ventures Middle East, the UAE based portal that provides construction research the number of contracts decreased by 58.2% compared to the previous year. Between January and September 2008 a total of 425 contracts valued at AED 222.5 billion were awarded in the UAE.
Mr Mibu John Syndicated Research Director at Ventures Middle East said that the construction industry will witness a minor momentum during the last quarter of 2009. Given the current economic condition across the globe and in the UAE, the movement has been quite positive so far. Dubai, which performed phenomenally during 2008, was affected during most of 2009."
He said that Abu Dhabi will exceed Dubai in terms of number of contracts and value in the next 16 to 24 months.
The percentage share of Abu Dhabi has significantly increased over the past year. While contracts in Abu Dhabi constituted about 27% of the overall number awarded during the first Q3 in 2008, these increased to 38.49% in 2009. In Abu Dhabi, about 115 contracts were awarded in 2008 while about 82 were granted from January 2009 to date. However, Dubai continues to lead the figures in terms of deals with 249 contracts awarded in 2008 compared to 93 this year.
Abu Dhabi, however, leads the table in terms of value. The contracts awarded in Abu Dhabi were valued at AED 49.31 billion compared to AED 153.289 billion in Dubai in 2008. On the other hand, Abu Dhabi has awarded contracts valued at AED 44.83 billion compared to Dubai's AED 36.78 billion so far in 2009.
Mr Imad Al Jamal VP of the UAE Contractors Association said that the slowdown during the Q3 should be analyzed on the basis of the Ramadan holidays rather than a market trend based on the economy.
He said that "There has been a general slowdown in the construction sector in 2009 compared to 2008. But the past 2 to 3 months were specifically slow because of holidays. It happens every year."
The Q3 of 2008 also witnessed a drastic drop in the number of contracts awarded compared to the previous quarters. A total of 111 contracts were awarded during the Q3 compared to 167 and 147 during the first two quarters respectively.
According to Mr Jamal, Sharjah and the Northern Emirates will continue to remain the most affected due to various factors including lack of infrastructure and regulation, thereby affecting market confidence.
Although the Q4 will see a much better performance compared to the previous quarter, a more concrete forward movement will be visible only by the first and Q2 of 2010. He said that "We are witnessing a bottoming out as far as construction costs are concerned. The demand will slowly start to pick up. The liquidity crisis continues to exist and payments are still pending up to 6 months."
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Source:steelguru.com |
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