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
Market Data | Apr 23, 2020
Construction Contractor Confidence plummets in February
As of February 2020, fewer than 30% of contractors expected their sales to increase over the next six months.
Market Data | Apr 23, 2020
5 must reads for the AEC industry today: April 23, 2020
The death of the department store and how to return to work when the time comes.
Market Data | Apr 22, 2020
6 must reads for the AEC industry today: April 22, 2020
Repurposed containers can be used as rapid response airborne infection isolation rooms and virtual site visits help control infection on project sites.
Market Data | Apr 21, 2020
ABC's Construction Backlog Indicator down in February
Backlog for firms working in the infrastructure segment rose by 1.3 months in February while backlog for commercial and institutional and heavy industrial firms declined by 0.6 months and 0.7 months, respectively.
Market Data | Apr 21, 2020
5 must reads for the AEC industry today: April 21, 2020
IoT system helps contractors keep their distance and the multifamily market flattens.
Market Data | Apr 20, 2020
6 must reads for the AEC industry today: April 20, 2020
The continent's tallest living wall and NMHC survey shows significant delays in apartment construction.
Market Data | Apr 17, 2020
Construction employment declines in 20 states and D.C. in March, in line with industry survey showing growing job losses for the sector
New monthly job loss data foreshadows more layoffs amid project cancellations and state cutbacks in road projects as association calls for more small business relief and immediate aid for highway funding.
Market Data | Apr 17, 2020
5 must reads for the AEC industry today: April 17, 2020
Meet the 'AEC outsiders' pushing the industry forward and the world's largest Living Building.
Market Data | Apr 16, 2020
5 must reads for the AEC industry today: April 16, 2020
The SMPS Foundation and Building Design+Construction are studying the impact of the coronavirus pandemic on the ability to attain and retain clients and conduct projects and Saks Fifth Avenue plans a sanitized post-coronavirus opening.
Market Data | Apr 15, 2020
5 must reads for the AEC industry today: April 15, 2020
Buildings as "open source platforms" and 3D printing finds its grove producing face shields.