Construction sector contributes around 6.4% to Dubai’s GDP

Business Bureau, Gulf Today

Expo 2020 and government-led infrastructure projects were key factors driving the growth of Dubai’s construction sector in 2018 and 2019, and this is trend expected to continue over the next two years, according to new analysis released by Dubai Chamber of Commerce and Industry (DCCI) at a briefing organised for delegates attending the Big 5 exhibition.

The analysis, based on recent data from BNC, IMF, Haver Analytics and Fitch Connect, revealed that the construction sector contributed an estimated 6.4% to Dubai’s GDP in 2018. Currently, there are 4,792 current active projects in Dubai, accounting for 42 per cent of the UAE’s total.

Other key growth drivers for Dubai’s construction market include the emirate’s strong economic fundamentals and diversification strategy, steady increase in population and number of tourists, sustained infrastructure investment over the medium term and major government investments in transportation.

Most Expo 2020 related infrastructure projects are either under construction or completed, while the majority of the contracts are for building works located at the Expo site. Other mega projects include expansions of Al Maktoum International Airport (DWC), Jebel Ali Port and the Dubai Metro Red line connecting the city centre to the Expo 2020 site.

In addition, the findings showed that the UAE leads the GCC in the value of awarded contracts for 2019 as the country is estimated to have $48.4 billion worth of contracts in the pipeline, followed by Saudi Arabia ($40.2 billion) and Kuwait ($15.8 billion). The UAE outperforms other countries in the region when it comes to the contribution of its construction sector to national GDP with the value of this figure reaching $33.2 billion in 2018.

The annual briefing, held at Dubai Chamber’s headquarters, was attended by 100 delegates from more than 16 countries. The event provided an ideal platform for industry stakeholders to learn more about Dubai’s economy, business environment and construction market.

Addressing delegates during the event, Hassan Al Hashemi, Vice President of International Relations at Dubai Chamber, noted that the strong participation at the briefing and Big 5 exhibition, reflected growing international interest and confidence in Dubai’s economy and construction market. The briefing offered an opportunity for delegates to network with the local business community and get a glimpse of new projects in the pipeline, he explained.

Al Hashemi described Dubai as a land of opportunity for stakeholders in the global construction industry and highlighted the various competitive advantages offered by the emirate such as its world-class infrastructure, business-friendly environment and 30 plus free zones, adding that the current timing is deal to explore the vast potential in the market as plenty of exciting business opportunities emerge in the lead up to Expo 2020.

Established in 1965, the Dubai Chamber of Commerce & Industry is a non-profit public entity, whose mission is to represent, support and protect the interests of the business community in Dubai by creating a favourable business environment, supporting the development of business, and by promoting Dubai as an international business hub.

Meanwhile the Dubai Chamber of Commerce and Industry (Dubai Chamber) has announced that it has signed a memorandum of understanding (MoU) with the General Directorate of Residency and Foreigners Affairs (GDRFA) and Dubai Free Zone Council to launch the “Be Part of Dubai” initiative which will see prominent businessmen receive UAE Golden Residency Visas.