Business | Construction
Construction firms feel the heat of real estate slowdown
Major companies putting projects on hold and planning job cuts as sales decline and customers seek cheaper options.
- Reuters
- Published: 00:04 November 24, 2008
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Value of Gulf projects still rising
Value of Gulf projects still rising
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Regional industry trade fair opens
Regional industry trade fair opens
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The Big 5: Day 1
All the action at the Mideast's biggest construction exhibition
Dubai: From prefabricated walls to pipework and fittings, Gulf construction companies are putting plans on hold and see tough times ahead in Dubai, as developers review and slow projects due to the global credit crisis.
The once-booming real estate sector of the emirate is feeling the pain as projects are scaled back, property prices fall, and jobs are cut.
GulfWall, a firm that supplies precast walling and partition systems, has put a Dubai hotel and resort project on hold, its director Toby Cooke said at the Big 5 exhibition on Sunday.
"Controlling supply is what they [the government] will do and what they are doing. They have a committee ... it's sensible," he said referring to the committee set up by Dubai earlier this month to recommend ways to tackle the impact of the global financial crisis on the economy, including real estate and banks.
Trading and engineering firm German-Gulf Enterprises is expecting a fall in sales of up to 50 per cent for concrete pumps and batching plants next year as orders from concrete companies are expected to fall.
"People on the verge of taking deliveries are postponing because of the credit crisis, maybe because business on their side is lower," Paresh Ashar, a manager at the firm said.
Andreas Pennekamp, head of marketing building technology at Rehau, a firm that specialises in polymer manufacturing, said while the firm's sales had not yet been affected, the number of customers looking for cheaper pipes had risen.
Sama Dubai, the international real estate arm of Dubai Holding, said last week it was reviewing its project pipeline and considering job cuts.
Nakheel said it was witnessing a slowdown in the rate of real estate sales and last month announced it had scaled back dredging work on Palm Deira.
"Two or three years ago this exhibition was really busy," said the firm's sales and marketing manager, Jalal Nofal. "This year it is half full."
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