Construction activity in the UAE hit a five-year high in Q3 2023 for new business enquiries, according to the latest Royal Institution of Chartered Surveyors (RICS) global construction monitor.

The headline construction activity index posted a firmly positive 45% reading, while the private residential sector reported the strongest sentiment at 56%, with all other sectors deep within positive territory.  

“Construction activity remains strong and firm in the country,” RICS stated, adding, “future outlook remains positive for the foreseeable future.”

Despite being one of the top global performers in the construction industry, the UAE faces growth constraints due to shortages in skilled trades, such as quantity surveyors and managers, and labour, as well as rising material costs.

Anecdotal responses indicate Saudi Arabia’s giga projects are competing for skills and building materials in the region, leading to price increase for essential resources, RICS added.

In current conditions, the UAE should remain one of the leading lights of the global construction sector.

Last month, projects worth $101 billion were awarded in the first half of 2023 in the Middle East and North Africa (MENA), global consultancy JLL said.

Almost 67% of the total project awards, or $44 billion, came from Saudi Arabia ($44 billion) and the UAE contributed $23 billion.

(Editing by Brinda Darasha; brinda.darasha@lseg.com)