Print
Email
Discuss this article ( Comments)
zoom
Britain's US$142bn building industry has fallen on hard times. Plummeting property prices, a global credit squeeze and falling orders have encouraged the industry's biggest player to look to Dubai to shore up revenues - where it is already generating 10% of global sales from just a handful of contracts.
British builders are famously pessimistic, even during boom times. Now they really do have something to complain about as the UK homebuilding industry faces its worst slump in 25 years.
Despite the downturn, Balfour Beatty CEO Ian Tyler looks unperturbed as he walks around one of the company's most remote outposts. It is also one of the most profitable ones.
Deep in the desert, miles away from Dubai's gleaming skyscrapers, is a newly constructed training centre where hundreds of men, recruited mainly from India, will learn the skills that are in short supply on buildings sites around the sheikhdom.
Hard times
Around him bricklayers learn how to build walls with reusable lime, while trainee scaffolders clamber over raised platforms and steelfixers twist and bend rusty pieces of metal.
It is a hive of construction activity that contrasts sharply with the depressed UK building industry, where Balfour Beatty generates most of its revenue as the biggest construction company in Britain.
Dubai has the largest single concentration of buildings under construction anywhere in the Gulf.
The introduction of foreign property ownership rights in 2002 sparked a six-year building boom which has transformed the emirate and added a series of mega-projects including the world's largest offshore islands, tallest building and biggest shopping centres.
The UK construction sector has fallen on hard times with contractors having the highest probability of breaking their loan conditions in 2008 according to Standard & Poor's.
The impact is now trickling down the supply chain and British construction companies are withholding as much as US$1.7bn in payments to suppliers according to the Nationalist Specialist Contractors Council.
But as the UK construction industry slows, the small emirate of Dubai is producing a disproportionately large chunk of orders for Balfour Beatty.
The contractor is budgeting for US$1.2bn in UAE orders during 2008 and that could grow even further next year.
"Dubai is a growing part of our business and will continue to grow notwithstanding current market conditions," says Tyler. "Dubai will contribute somewhere around US$1.2bn."
