The Middle East Construction Sector Roundup: Nov 2013

The Middle East Construction Sector Roundup: Nov 2013

During the first half of this year, $63 billion worth of new construction contracts were awarded in the Gulf (GCC). The figure represents a 53% increase over the last six months of 2012, and forms part of the $1.5 trillion which is the estimated value of ongoing projects in the region (as per MEED Projects).

This, at a time when Business Monitor International put the value of UAE’s construction industry at ~ $41 billion in 2013 alone, and Dubai, the perennial favorite of expats, saw the property and construction sector contribute as much as 21% of its GDP growth in the first half of the year.

Speaking in the context of ‘The Big 5’, a construction industry event, IBS Ramfoam’s Commercial Director Tim Mulqueen pointed to an estimated $5 trillion being spent in the construction industry within the next four years. “The UAE is really back and open for business,” he said.

Clearly, construction in the Middle East is on an upswing, and the demand for experienced industry professionals is soon to turn into a clamor.

Sources:

http://www.constructionweekonline.com  

http://www.zawya.com/story/International_construction_manufacturers_eye_the_Middle_East_as_a_prime_location_for_introducing_latest_innovations-ZAWYA20131029091333/

And all the action is at…

The growth cuts across private as well as government-spurred construction and infrastructure projects. Where residential construction is concerned, growth in job opportunities, increasing salary and income in the region, and a supportive policy framework are pushing growth. This inflow of liquidity ensures that projects get completed on time, thus boosting investor confidence and further driving investment.

If you are in the construction business, focus your sights on Saudi Arabia and Qatar. In 2010-12, the countries’ construction sectors grew at an average of 10%, and the growth is only picking up speed this year.

Qatar, especially, has good reason to hurry. The country has just nine years to prepare its infrastructure to host the 2022 FIFA World Cup. One of the key projects involved, the Doha Metro has just awarded contracts worth $8 billion this June. Also on the anvil are mega projects such as Mshereib’s Downtown Doha.

What the Expo means to Dubai

Like Qatar, Dubai’s bid to host the World Expo 2020, if successful, will certainly launch a flurry of construction and infrastructure projects. With final host selection a mere three weeks away, this is a good time to take a look at the impact a possible win can have.

Three years ago, in 2010, China hosted the most recent World Expo in Shanghai, drawing participation from 192 countries and 50 international organizations. A record 73 million people visited the event, which cost $1.89 billion to run. Overall profit was pegged at $158 million.

Though Dubai already has remarkable infrastructure, the Emirate is in no way prepared to handle such a staggering influx of people. Winning the bid, therefore, would mean a lot more projects, a lot more growth, all crammed within a time span of just 6-7 years.

Source: http://expo2020dubai.ae/en/hello_2020/article/making_an_impact_the_power_of_world_expo

Where the others stand

Saudi Arabia, meanwhile, is focusing on transport infrastructure, including a railway line to link the holy cities of Mecca, Medina and Jeddah. In a grand plan to ensure a more even distribution of population, the country is working on ‘economic cities’, even as the private sector remains engaged in ambitious projects – such as the Prince Alwaleed bin Talal’s Kingdom Tower in Jeddah. Slated for completion in 2017, the kilometer-tall Tower will be the world’s tallest tower ever.

Oman and Bahrain too are working on some large-scale projects, thanks in part due to the $20 billion infrastructure grant promised them by the wealthier Gulf states in 2011.

On the whole, the region is poised to start work on significant building projects in the new few months, thanks to investments from the UK, Russia, India and East Asia.

Source: http://www.businessinsider.in/Construction-In-The-Middle-East-Is-Booming-Again/articleshow/23739298.cms

What’s in it for you?

The latest Morgan McKinley UAE Employment Monitor states that professional job opportunities in the UAE have risen by 15% year-on-year. This has a direct bearing on expats – who comprise as much as 85-95% of the workforce in the Middle East.

Of the total residents in Dubai, 95% are expats. Surveys reveal that Dubai and Abu Dhabi are the favorite destinations for construction industry professionals. As a whole, 51% expats favor the Middle East to build their overseas career.

The announcement of new plans and projects has already had a positive impact on hiring and on intent to hire, within construction as well as the industries that supply this sector.

In an Emirates 24/7 report, Trefor Murphy, managing director, Morgan McKinley UAE, states: “As borrowing costs fall and international liquidity rushes back, Dubai in particular has witnessed the revival of development projects that were shelved during the financial crisis.”

Last year, the UAE emerged as the biggest construction market in the Gulf. “This has created demand for architects, surveyors, civil engineers and project managers. And as demand for both commercial and domestic property continues to climb, I don’t anticipate this trend reversing,” asserts Murphy.

Bearing this out, Bayt.com’s recent survey on hiring trends in the region showed that 30% of surveyed employers in the Middle East claimed they will “definitely hire” in the next three months (i.e. in September, October and November).

Large local companies are most likely to hire for jobs in the next 3 months, followed in second place by multi-national corporations. Engineering graduates/ postgraduates and those with a business qualification are most in demand.

Sources:

-        http://www.emirates247.com/news/emirates/uae-market-in-hiring-mode-click-for-professionals-in-demand-2013-10-22-1.525167

-        www.careerstructure.com

-        http://www.nytimes.com/2013/10/14/world/middleeast/gulf-states-face-lack-of-qualified-citizens-for-energy-jobs.html?_r=0

Money matters

Following current trends in the Middle East, salaries in the construction sector too are rising. Currently, a Project Director can expect to earn AED 60K (roughly $16.5K) per month. Project Managers are looking at salary levels of AED 35K ($10K), Construction Directors at AED 60K ($16.5K), and Construction Managers at an average salary of AED 45K ($12.3K) each month.

As a Site Engineer, you could make anywhere between $4K and $7K a month, and as a Construction Manager, you’d be paid between $8.5K and $14K.

UAE’s bid to win the World Expo 2020 event is likely to create long-lasting positive impact on the jobs and salary market. Industry analysts already predict growth and increased confidence in the local real estate market as well. According to Ben Waddilove, director, Macdonald and Company: “Many long-term developer and consultancy clients are beginning to hire mid- to senior-level individuals for feasibility studies and due diligence, design and planning and development and delivery roles.” Waddilove sees salary levels holding firm in general, and predicts a steady increase in the coming months in line with inflation.

Not surprisingly then, there is good demand for candidates with experience of all facets of the project development life cycle. Overseas professionals are still attracted to the region for financial, career and family reasons. “The current situation is definitely improving and we expect that the Gulf States will continue to achieve significant GDP growth next year,” Waddilove concludes.

 

Sources:

-        http://www.bigprojectme.com/news/dubai-and-abu-dhabi-top-destination-for-construction-professionals/

-        http://www.arabianbusiness.com/dubai-real-estate-salaries-set-rise-amid-new-boom-522759.html

-        http://www.aecom.com/deployedfiles/Internet/Geographies/Middle%20East/2013%20ME%20Handbook_9%20June%202013%20FINAL%20w%20cover.pdf

 

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