Construction output expected to return to growth in 2011

source The National

Construction output in the Emirates will contract until the end of next year, but start to grow again at an annual rate of at least 5 per cent between 2011 and 2020, a report says.

Citing ambitious infrastructure plans and a growing economy, the Global Construction 2020 report said the hard-hit UAE construction sector would rebound, but with a smaller role in the country’s GDP.

“There has been a deterioration in the real estate market in the UAE during the last 12 to 18 months, particularly in Dubai, but demand remains strong for infrastructure,” said the report, which was compiled by Global Construction Perspectives and Oxford University’s Oxford Economics.

“The problem could be even worse in the commercial sector.”

Hundreds of construction projects around the Emirates have come to a halt this year after property prices began to fall and banks withdrew lending.

While the slowdown has hit construction of new homes, the Government hopes to offset the decline with increased infrastructure spending. Abu Dhabi alone plans to spend US$275 billion (Dh1.01 trillion) on infrastructure in the next five years.

“We therefore expect, after a temporary slowdown in 2009-2010, that construction output in the UAE will increase by 5 to 7 per cent per annum between 2011 and 2020,” the report said.

Sultan al Mansouri, the Minister of Economy, said recently that Abu Dhabi would spend $1tn on infrastructure projects over the medium term to stimulate the economy.

“This will lead to extraordinary demand for building materials and technological innovations, thus boosting the economy further,” Mr al Mansouri said.

Global construction output was expected to grow 70 per cent by 2020 as emerging economies spent increasing amounts on infrastructure and development, the report said. This comes after record drops for the sector, which has seen output decline by $650bn since 2007 in developed countries.

“The recent slump in the global economy has been exceptionally severe and construction has been hit more severely than most industries,” the report said.

The global construction market is estimated to be worth $12.7tn by 2020, with developing nations representing $7tn – double their current output.

China is likely to overtake the US as the largest construction market as early as 2018, the report said. Spending on transport infrastructure, utilities and government-related buildings in developing countries will rise by 128 per cent by 2020.

The recovery of the sector will include developed nations such as the US and Japan, which will see construction output grow by 35 per cent to $5.7tn by the end of 2020, the report said.

Real estate and construction stocks drive UAE markets' rally

source Gulf News

Dubai: UAE markets rallied on Thursday with real estate and construction stocks leading the surge. Dubai Financial Market index climbed 2.73 per cent to 1,924.01.

Emaar was the biggest gainer of the day, leaping 5.78 per cent rise to Dh3.30, regaining most of Wednesday’s losses while Union Properties rose 3.60 per cent to Dh1.15.

Arabtec gained 5.47 per cent to Dh2.89, while Dubai Islamic Bank rose 2.35 to Dh2.61.

Abu Dhabi rose 1.6 per cent, its largest gain for a month, closing at 2,867. Real estate led the gains in the market, rising 3.67 per cent. Aldar climbed 4.95 per cent while energy giant Abu Dhabi National Energy Company (Taqa), jumped 6.83 per cent.

Construction supplier defies credit crisis and expands

source Arabian Business

UAE-based Kanoo Machinery, a supplier of equipment to the construction industry is strengthening its presence by building two new purpose-built offices, warehouses and product support facilities in Dubai's Jebel Ali Free Zone and in Mussaffah in Abu Dhabi, the company has announced.

Kannan Chandrasekaran, group product manager, said:

"With the recent economical crisis hitting the world hard, the only solace for most companies is the Gulf region, because of its committed long-term project investments.
Story continues below ↓
advertisement

"Our recent expansion proves we are keeping pace with the UAE and other GCC countries' construction boom, and we want to make sure this continues."

"Within the last year, we have signed distribution agreements with GEDA, a German manufacturer of personnel and material hoists. This allows us to offer a full range of hoisting options from 250kg ladder lifts - well-suited to villa developments - up to three tonne twin cage machines for high-rise buildings of up to 450 metres.

The company has recently opened branches in Sharjah and Ras Al Khaimah to cater to growing economic activity in the northern emirates. Demand for plant, construction machinery, vehicles and equipment is expected to grow by 20% over the next four years in the Middle East.

Construction boom spurs 15pc rise in steel prices

DUBAI: Steel prices in the UAE have risen about 15 per cent so far this month as a construction boom in the GCC oil exporter has drained the building materials market, traders said yesterday.

A tonne of reinforcing steel bar (rebar), used in construction, fetched around $1,550 yesterday, up from around $1,350 in the last week of June, dealers said.

One executive from a Gulf steel producer said he expected prices to hit $1,650 a tonne by the end of the month.

The rising cost of building materials is helping fuel inflation across the Gulf.

The GCC is investing heavily in real estate and building material suppliers are struggling to keep up with demand in the UAE.

"Prices of steel and other construction materials have not eased, even for a single week, since the beginning of the year and I don't see any signs of a downward trend," one Sharjah-based trader said.

"What we have now is limited supplies of steel, higher demand from construction contractors and costs of manufacturing steel at origin are going up due to inflation in these countries," he said.

Global rebar consumption reached 218 million tonnes last year. Around 65pc-70pc of consumption comes from the Middle East and Asia while the highest consumption per capita is in the UAE.

The total value of civil projects in the Gulf is estimated at around $1.5 trillion, and demand for housing is expected to soar on robust population growth, particularly in Saudi Arabia, analysts have said.

Gulf rebar consumption was expected to reach 14m tonnes this year, a 13pc increase from last year, they added.

"Every producer in the region is trying to increase output to meet demand from the construction sector and our imports bill is increase everyday on inflation," a steel trader said.