The construction industry, although one of the largest contributors to the UAE economy, is particularly vulnerable to economic cycles. The pandemic has disrupted an industry that faces challenges around the globe and has a history of being slow to change and resistant to adopting technology.
A 2020 McKinsey report found construction is the biggest industry in the world - and yet, it is not performing well, even outside of crises. In numbers, the industry represents 13 per cent of global GDP and 14.5 per cent of the UAE’s GDP as of 2018. However, globally, it has recorded only 1 per cent annual growth.
It is evident that the industry needs to adapt to grow profitably in a post-COVID-19 world. I will outline four shifts that I predict will change the course of the UAE construction industry, and how they can enable the industry to survive and thrive.
In the UAE, there are far too many players, and a clean-up of the construction industry is required. We expect distressed players will exit leaving room for established companies to compete, collaborate and grow together.
Governments around the world, including the UAE, have been looking at implementing measures to mitigate the impact of global movements on the industry, while simultaneously encouraging players to operate in a more energy-efficient and cost-efficient manner.
Regulation, such as the new building code issued by the Dubai government, coupled with new technologies will help streamline overall costs, improve profitability and eventually contribute to a new future for the industry.
Disruption by tech
New technologies will play a key role in the new future of the construction industry – enabling collaboration, data-led decision making and greater control of the value chain. For example, robots are slowly appearing in construction sites, conducting image capture or laser scanning work in places that humans cannot reach. There are robots that improve the speed and quality of regular construction work as well.
Artificial intelligence, 3D printing, and drones have also made an appearance, improving timelines and safety on construction sites. The use of these will facilitate the move towards a sustainable future for contractors and developers.
Looking beyond the buildings themselves, the threat of climate change is increasing and cannot be ignored by the construction industry. Sourcing the right materials to create healthy living spaces will also become a priority.
Recognising the very real threat of climate change, the UAE has implemented a number of initiatives including the UAE Green Development Strategy. As a key contributor to the UAE economy, the construction industry will be increasingly aware of their impact on the environment.
Companies will increasingly consider the carbon and general environmental impact of sourcing construction materials, gravitating towards materials that use less energy and water. Supply chains will be optimised in a way that makes it possible to source energy-efficient and sustainable materials.
Shift in focus
As we move towards a post-COVID-19 world, it is evident that priorities in construction and development will change, as customers will become increasingly sophisticated. The pandemic has made all of us re-asses the spaces we want to live and work in.
Residents will look for energy-efficient, smart buildings that have good indoor air quality. Subsequently, these sorts of buildings will become a higher priority for developers. Healthy buildings will be a key component of future cities, and governments will need to work closely with contractors in order to introduce regulation that ensures all buildings, specifically schools and hospitals, are built to standards in a cost-efficient manner.
Like in other industries, the pandemic has accelerated changes that were already underway in construction. The cities of the future will be even more concerned with the health of residents, opting for policies that promote better air quality, and energy efficiency.
New technology combined with the appropriate regulation and used in a way that prioritises sustainable development will be the key to unlocking a valuable and sustainable future for the construction industry.
- Abdulrahman Khansaheb is Managing Director at Khansaheb Industries.