2012-08-02 12:39:36 - Recently published research from Business Monitor International, "United Arab Emirates Infrastructure Report Q3 2012", is now available at Fast Market Research
BMI View: Following the 2008 financial crisis and its repercussions, the UAE's construction sector appears to have turned a corner and is gradually returning to growth, albeit a modest one. Public spending and a burgeoning tourism sector is driving activity and picking up some of the slack left behind from the slowdown in the real estate sector. However, we expect the scale of future projects to be moderated, in order to match realistic demand expectations. In 2012, we expect a leaner project pipeline and do not anticipate any major flagship projects to come online over the course of the year.
Growth in the UAE's infrastructure sector are being driven by the following factors:
Full Report Details at
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is being made on flagship multibillion dollar projects, such as the expansion of Dubai and Abu Dhabi international airports. These projects sustain industry activity, though they are also seeing delays and downsizings, such as those experienced at the Al Maktoom International Airport (Dubai).
* We continue to see increasing opportunities in the hospitality and tourism sectors. Tourism and tourism-related projects provided a welcome source of value for the construction industry and wider economy in 2011. We expect this to continue through 2012 and beyond as the UAE, most notably Dubai and Abu Dhabi, position themselves as global business and tourism hubs.
Downside risks to outlook:
* The nuclear power project in Abu Dhabi is already being plagued by project cost inflation, even though it is still in the preliminary construction phase. The cost estimate has risen by a staggering US$10bn since its initial announcement, taking the total to US$30bn, according to press reports that cite sources close to the project. Financing will be overwhelmingly sovereignbacked and generated with a small commercial loan aspect, according to preliminary reports.
* While certain large-scale projects are still ongoing, the pipeline for new mega-projects is very thin, with the Hassyan IPP (though facing undetermined delays, following a halted bidding process in April 2012) and Etihad Rail being the last of the big-ticket projects on the agenda.
* Data and estimates on the value of projects that have been cancelled continue to surface. Citigroup estimates that from the beginning of 2009 to August 2011, projects worth US$170bn were delayed or cancelled in the UAE. The majority of these were in the real estate sector, the most notable of which were the Louvre Abu Dhabi, Zayed National Museum and the Guggenheim Wing, which are all facing delays of up to three years.
* The UAE has certainly benefited from the revolutions sweeping the Arab world, as tourist numbers have risen and businesses seeking a more stable political situation have moved Oilfuelled- cash at a time of global financial turbulence has largely shielded the country from much distress. However, previously overdone and oversized investments have created their own problems - as seen from the repercussions following the crash in 2008. Whilst the government has the financial muscle to buy its way out of the trouble, increased social spending is good for the short run, but not great for increasing skills and productivity in a country seeking to diversify and transform its oil-dependent economy.
Report Table of Contents:
- UAE Infrastructure SWOT
- UAE Competitive Landscape
- Table: UAE Construction Players - Key Financial Data
- Global Overview
- Middle East Overview
- Cement Forecast
- Table: UAE Cement Production and Consumption Data, 2009 - 2016
- Table: UAE Cement Production and Consumption Long Term Forecasts, 2014 - 2021
Industry Forecast Scenario
- Table: UAE Construction And Infrastructure Industry Data, 2008 - 2016
- Table: UAE Construction And Infrastructure Long-Term Forecasts, 2013 - 2021
- Construction And Infrastructure Forecast Scenario
- Outlook and Overview
- Major Projects Table - Transport Infrastructure
- Table: Major Projects - Transport
Energy And Utilities Infrastructure
- Outlook and Overview
- Major Projects Table - Energy and Utilities Infrastructure
- Table: Major Projects - Energy And Utilities
Residential/Non-Residential Construction And Social Infrastructure
- Outlook And Overview
- Major Projects Table - Residential/Non-Residential Construction And Social Infrastructure
- Table: Major Projects - Construction And Social Infrastructure
- UAE's Risk/Reward Ratings
- Regional Overview
- Table: Regional Infrastructure Risk/Reward Ratings
- Arabtec Construction
- Dutco Balfour Beatty Group
- Habtoor Leighton Group
- Drake & Scull International
- Veolia Water
- Industry Forecasts
- Construction Industry
- Data Methodology
- New Infrastructure Data Sub-sectors
- Capital Investment
- Construction Sector Employment
- Infrastructure Risk/Reward Ratings
- Table: Infrastructure Business Environment Indicators
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