The UAE’s construction sector has been indirectly affected by some of the social distancing measures that have been implemented to ‘flatten the curve’ of the spread of the coronavirus (COVID-19), says GlobalData, a leading data and analytics company.
Global economic activity has slowed sharply following the rapid spread of the virus. The pandemic has caused business closures, city curfews, travel bans, financial market upheavals and manufacturing shutdowns in major global economic hubs.
The impact of the virus has also been felt in the UAE, where precautionary measures have been implemented to combat the spread of the virus through social distancing.
Colin Foreman, Deputy Editor at GlobalData, comments: “In the construction sector, remote working, which some private sector employers in the UAE have voluntarily offered, could impact administrative procedures that are essential for site works to progress, such as sign-offs and schedule management.
“Meanwhile, even though cargo travel currently faces fewer restrictions than passenger flights, supply chain disruptions are likely to deepen in the weeks ahead. China – the world’s largest exporter and the epicentre of COVID-19 – has only just begun a slow recovery after its factories were shut down for almost two months to curb the spread of the virus.”
Procurement alternatives to Chinese suppliers, such as those in India, Singapore, Thailand and the US, are already being approached by construction companies in the UAE. However, as more countries suspend manufacturing and business operations to contain the virus, questions persist about whether these new supply markets will be in a position to fulfil their export commitments during the second and third quarters of this year.
Foreman continues: “So far, UAE authorities have managed to implement social activity suspensions without severely affecting economic output.”
In the near term, the UAE Central Bank’s AED100bn ($27bn) stimulus package for local banks and small- and medium-sized enterprises (SMEs) is also expected to benefit the local construction sector, the majority of which includes SMEs in the design, contracting and fit-out industries.
Foreman concludes: “It is not yet clear when the spread of COVID-19 will peak in the Middle East. This will largely determine the guidelines for social movement that health authorities implement over the next few weeks. For now, however, it is construction as usual in the UAE.”
Related Stories
Hotel Facilities | Oct 27, 2020
Hotel construction pipeline dips 7% in Q3 2020
Hospitality developers continue to closely monitor the impact the coronavirus will have on travel demand, according to Lodging Econometrics.
Market Data | Oct 22, 2020
Multifamily’s long-term outlook rebounds to pre-covid levels in Q3
Slump was a short one for multifamily market as 3rd quarter proposal activity soars.
Market Data | Oct 21, 2020
Architectural billings slowdown moderated in September
AIA’s ABI score for September was 47.0 compared to 40.0 in August.
Market Data | Oct 21, 2020
Only eight states top February peak construction employment despite gains in 32 states last month
California and Vermont post worst losses since February as Virginia and South Dakota add the most.
Market Data | Oct 20, 2020
AIA releases updated contracts for multi-family residential and prototype residential projects
New resources provide insights into mitigating and managing risk on complex residential design and construction projects.
Market Data | Oct 20, 2020
Construction officials call on Trump and Biden to establish a nationwide vaccine distribution plan to avoid confusion and delays
Officials say nationwide plan should set clear distribution priorities.
Market Data | Oct 19, 2020
5 must reads for the AEC industry today: October 19, 2020
Lower cost metros outperform pricey gateway markets and E-commerce fuels industrial's unstoppable engine.
Market Data | Oct 19, 2020
Lower-cost metros continue to outperform pricey gateway markets, Yardi Matrix reports
But year-over-year multifamily trendline remained negative at -0.3%, unchanged from July.
Market Data | Oct 16, 2020
5 must reads for the AEC industry today: October 16, 2020
Princeton's new museum and Miami's yacht-inspired luxury condos.
Market Data | Oct 15, 2020
6 must reads for the AEC industry today: October 15, 2020
Chicago's Bank of America Tower opens and altering facilities for a post-COVID-19 world.