Construction of the UAE handled the pandemic in a great way. However, the Dubai construction challenge remains and needs to be faced. The UAE’s construction sites kept being extremely busy through the pandemic’ worth’ phase in 2020.
Construction is an industry that has gone through the ups and downs during the last five years. If this industry is still active during the pandemic, this is a powerful industry. In the upcoming year, this construction industry is expected to grow better than last year and this year.
Development of Dubai Construction Industry
For the last decades, the construction industry in Dubai has delivered iconic projects in countless numbers. Many of those construction projects are considered to be the firsts in the world. Some of those amazing construction projects include the Palm Jumeirah and Burj Khalifa.
Even though there are periods of cuts in the government spending, lower oil prices, geopolitical uncertainties, and demand-supply variances across the region, the country has always managed to show powerful resilience while maintaining the lead position in delivering ambitions and constructions.
Along the journey, there were many industry players that have contributed to Dubai’s success story. Those players include investors, owners, contractors, developers, suppliers, design professionals, craft workers, and consultants from across the world.
Recent Dubai Construction Challenge to Face
Recently, the success trend of Dubai has slowed. It is evidenced by the construction output’s drop. The fall and rise of construction activity in Dubai culminate on the current low that began in 2017.
The decline in Dubai’s construction activities put a strain on the finances of contractors. This condition of UAE Construction Post Covid also forced a lot of international firms to leave the Dubai market. Some international firms even had to alter the model so they can employ the lower cost staff.
Even though local firms in Dubai have been affected and many of them have stopped operating, international firms in Dubai have experienced the bigger impact and now are being replaced by the increasing Asian contractors and local competitors.
Steps to Overcome Dubai Construction Challenge
The recent decline in Dubai’s construction activities was not alone. The country also experienced a decline in economic activity. The slowdown offers tangible opportunities to Dubai in order to pause and also assess the current challenges in order to improve the performance of the market.
To revive Dubai’s market, there are various measures that should be implemented in parallel in order to mitigate the further decline. Changing the procurement balance is one of the recommended measures. Dubai’s project procurement is usually undertaken through some tender processes.
The lowest cost culture must be evaluated with the shift assessment to a new culture that will guarantee the fair competition. More stringent procurement policing and controls based on value are necessary.
The major challenge that is faced by the country for the last few weeks is that the owners of the project are struggling in defining their very own requirements. The result is incomplete specifications that led to the norm where the contractors are asked to work with the incomplete designs.