Dubai: Work on Dh2.56 trillion ($698 billion) worth of civil construction projects in the UAE is still progressing full steam ahead, despite the current economic climate, research shows.
Of an industry worth around $1.4 trillion, this means nearly half of all civil construction projects in the UAE are still underway.
"That's about 50 per cent of the projects are still proceeding. It's very good news and exactly the kind of information that will bring confidence back to the market place," said Nicholas Maclean, managing director, CB Richard Ellis.
A total of 1,289 UAE projects were recently assessed in a report by research house, Proleads.
These projects include buildings, infrastructure such as roads, railways, bridges and ports, educational and healthcare facilities, sport facilities and hotels.
However, it is becoming increasingly clear that the financial downturn is taking its toll on more than 50 per cent of all civil construction projects in the areas of real estate, leisure and entertainment are on hold, according to Proleads.
Around $582 billion of civil construction projects are now on hold, the research entity said.
This represents 52.8 per cent of the total civil construction portfolio in the country.
"The UAE may no longer be the land of milk and honey but it is still in a far better position than most," Emil Rademeyer, director of Proleads Global.
"To put it into perspective, the $698 billion of continuing work we are reporting is almost equivalent to the latest stimulus package proposed for the US," Rademeyer added.
While numerous real estate projects had been scheduled for completion in early 2009, the rate at which projects are being completed has slowed, according to Proleads.
Up until recently, the UAE construction industry was swamped with projects, as it tried to keep up with the booming property sector, which was driving up both prices and rental rates.
In the last months, however, the property scene in the UAE has changed, most visible in Dubai. Property prices in all sectors, including residential, commercial and retail are falling amid job cuts, especially in the real estate and construction industries. While projects delays are common in all markets, even in good times, it is the rate at which UAE projects are put on hold that will determine when the upswing will start.
The report recognises "potential trouble" if the rate at which projects go on hold increases, but sees the construction industry here as being resilient in terms of cash flow levels.
"It is this resilience that will eventually see UAE construction through to better times. The US economy took the world into recession and it will ultimately lead the global economy out of recession," the report said. .
