United Arab Emirates (UAE) contractors have reason for optimism, according to the results of a new study indicating the value of completed construction projects is expected to increase by 71 per cent to $79.8 billion (£51.3 billion) in 2012. Commercial property and hotel projects are expected to lead the way, with projected growth in the country’s hotel and hospitality project sector alone expected to triple to $7.3 billion (£4.6 billion) this year from $2.7 billion (£1.7 billion) in 2011.
This tremendous growth in construction projects is being generated as a result of increased demand for hotel space in the Gulf Cooperation Council. Room revenues are predicted to reach $22 billion (£14 billion) this year and are predicted to reach $27 billion (£17 billion) by 2015, according to Global Retail Development Index.
Building contracts worth over $57.8 billion (£37.1 billion) were awarded in the GCC in 2011. This figure includes projects in the commercial, retail, hospitality, and residential sectors. July and August are expected to be slow months due to summer and Ramadan, but building activity is expected to pick up in the last quarter of the year, and the positive wave of activity will roll forward into 2013.
Major companies like Dubai Properties Group, Nakheel, and Emaar are getting back into the construction game and have announced they will be launching new projects. The positive growth estimates for the Gulf Cooperation Council are based on the region’s strong economic growth, as its political stability. Strong oil prices and a Government which has plans to spend money to fuel its other sectors also work in its favour.
The Bank of America Merrill Lynch has revised its forecast for GCC’s economic growth to 4.3 per cent from 3.4 per cent. This is a very positive blip on the economic radar when so many countries are still struggling to recover from the debt crisis of 2008.
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