Report warns 30% jobs to go in 2 years

Twenty percent of jobs in Dubai’s construction industry could be lost this year, with a further 10% to be cut in 2010, according to a report released last week.

The report, issued by Swiss bank UBS, added that the number of residents in Dubai will shrink by 8% in this year and 2% in 2010, as expatriates employed in the real estate and construction sectors leave the city due to the problems facing those sectors.

According to the report, much of which was based on anecdotal evidence, around 50% of Dubai's current population, estimated at around 1.5 million people, are employed in the construction and real estate sectors.

The report also claimed that 30%-40% of infrastructure projects in Dubai have been cancelled or indefinitely delayed.

A decline in population would throw into doubt Dubai's growth plans over the next decade, which is based on continual annual population growth, meaning many construction projects may take much longer to complete than planned, according to a real estate expert.

Cluttons resident partner Ronald Hinchey said that some major developments may not be finished for another 50 years.

"Dubai has what it calls a 20-year vision, when in fact it should be a 50-year vision. Twenty years is too short," Hinchey told Construction Week after a meeting of the Dubai Property Society (DPS) the day before the release of the UBS report.

Hinchey added that the vision for Dubai, as communicated in documents such as the Dubai Strategic Plan 2015, was "courageous," but "unsustainable."

Some reports predict that the population of Dubai will increase from its current level of some 1.5 million to more than 4 million by 2020.

"Don't get me wrong. Dubai's vision is great, and courageous," Hinchey said. "But it wasn't sustainable. I think they need to look at revising those population figures."

Hinchey made a distinction between consumers and non-consumers, saying that around 50% of Dubai's population was non-consumers who "would not buy a car or a house."

"In any economy you need consumers," he said. "In terms of consumers there are only about 750,000 in Dubai right now."

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