By Andy Sambidge
Seminar on Dec. 24 will assess impact of global financial crisis on vital industry.
The impact of the global financial crisis on the economically vital construction sector in the UAE is to be assessed at a federal government level seminar next month.
Details of the special seminar in Abu Dhabi under the patronage of Sheikh Hamdan bin Mubarak Al Nahyan, the UAE minister of Public Works, emerged on the sidelines of The Big 5, the region’s biggest trade fair in Dubai.
“The whole industry will welcome this high level review of a sector which has such a vitally important role in the economy of the UAE,” said Simon Mellor, vice president Construction for show organisers dmg world media.
“It comes at a time when UAE authorities are providing solid support for the sector."
Six percent growth is expected in the UAE construction industry next year despite the global economic downturn.
“Global recession is forcing international companies to increasingly seek work outside of their home countries providing Middle East companies with greater competition in a region where governments remain committed to maintaining strong infrastructure growth in the face of the slowdown,” Mellor added.
The special seminar to be held on December 24 is being supported by the UAE Contractors Association – a voluntary body consisting of 730 member companies – which describes the construction sector as “one of the mainstays” of the UAE economy over recent decades.
Commenting on the impact of the global financial crisis on the construction sector in the UAE, Khalfan Al Ka'abi, head of the Contractors Committee of Abu Dhabi Chamber of Commerce, said: “Everyone expects that construction projects underway will continue as planned. The UAE economy remains strong and we will continue working with all contractors to help achieve their goals.”
Indeed, construction is a mainstay of the economy. The UAE economic growth of the last few years has been driven largely by construction, as has the population growth. These developers are trying to form a cartel to control the supply of property in the hope it props up prices, but this will have a much more rapid effect on the immediate *demand* for property. How many apartments and villas are rented to people working in construction? How are all these people going to stay in Dubai when so many projects are being suspended or cut? Are they going to be paid to sit around doing nothing? I doubt it. I have to say, 6% construction growth next year seems more than optimistic. It seems complete fantasy. These are the same guys after all who argued all along that Dubai's property market was not a bubble waiting to burst. I am not sure their predictions really have much weight to them any more.