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
Industry Research | Nov 28, 2016
Building America: The Merit Shop Scorecard
ABC releases state rankings on policies affecting construction industry.
Multifamily Housing | Nov 28, 2016
Axiometrics predicts apartment deliveries will peak by mid 2017
New York is projected to lead the nation next year, thanks to construction delays in 2016
Market Data | Nov 22, 2016
Construction activity will slow next year: JLL
Risk, labor, and technology are impacting what gets built.
Market Data | Nov 17, 2016
Architecture Billings Index rebounds after two down months
Decline in new design contracts suggests volatility in design activity to persist.
Market Data | Nov 11, 2016
Brand marketing: Why the B2B world needs to embrace consumers
The relevance of brand recognition has always been debatable in the B2B universe. With notable exceptions like BASF, few manufacturers or industry groups see value in generating top-of-mind awareness for their products and services with consumers.
Industry Research | Nov 8, 2016
Austin, Texas wins ‘Top City’ in the Emerging Trends in Real Estate outlook
Austin was followed on the list by Dallas/Fort Worth, Texas and Portland, Ore.
Market Data | Nov 2, 2016
Nonresidential construction spending down in September, but August data upwardly revised
The government revised the August nonresidential construction spending estimate from $686.6 billion to $696.6 billion.
Market Data | Oct 31, 2016
Nonresidential fixed investment expands again during solid third quarter
The acceleration in real GDP growth was driven by a combination of factors, including an upturn in exports, a smaller decrease in state and local government spending and an upturn in federal government spending, says ABC Chief Economist Anirban Basu.
Market Data | Oct 28, 2016
U.S. construction solid and stable in Q3 of 2016; Presidential election seen as influence on industry for 2017
Rider Levett Bucknall’s Third Quarter 2016 USA Construction Cost Report puts the complete spectrum of construction sectors and markets in perspective as it assesses the current state of the industry.
Industry Research | Oct 25, 2016
New HOK/CoreNet Global report explores impact of coworking on corporate real rstate
“Although coworking space makes up less than one percent of the world’s office space, it represents an important workforce trend and highlights the strong desire of today’s employees to have workplace choices, community and flexibility,” says Kay Sargent, Director of WorkPlace at HOK.
