Construction sector powers emirate's engine

Dubai: The construction sector's value to the economy exceeded Dh16 billion in 2005, according to a Dubai Chamber of Commerce and Industry (DCCI) report issued on Monday.

According to the report the GCC has experienced a boom in the sector and a significant percentage of project spending is taking place in the UAE.

The construction sector has benefited from a triple whammy oil revenues, repatriation of GCC money due to attractive business opportunities and historically low interest rates.

Dubai specifically possesses many incentives that have attracted foreign and domestic direct investment.

Key factors include the stability of the market to absorb investment, availability of financial facilities, higher return on investment and the expectation of a new law that will calrify expatriate rights to own property.

The construction sector in Dubai is considered a key sources of employment, income and growth.

The sector contributed 12.2 per cent of Dubai's non-oil GDP in 2004.

The construction sector's value increased by 166 per cent during the period 2000-2004 and has grown at an annual average growth rate of 27.7 per cent during the same period.

Ambitious construction projects will keep the sector buouyant: Burj Dubai, Nakheel Islands, Dubai Land, the Dubai light rail transport (LRT) project and Deira Palm Island.

In addition, the announcement of a $4.3 billion plan to redevelop Dubai's World Trade Center will further catalyse the sector.

According to the DCCI's membership database, the number of active construction companies amounted to 5,938 in 2005.

The small size company segment "which employ 1-19 workers" is dominant in the sector. It represents 76 per cent of the total number of companies in 2005.