Demand for construction industry services in the United Arab Emirates (UAE) is undergoing rapid acceleration, according to a recent report by consultancy group Ventures Middle East.Â
"Exploring UAE’s Strong Investment Environment" predicts that government spending in the Emirates will reach $46bn by the end of the year, an increase of 22% on the $38bn recorded in 2013.Â
Julian Herbert, the director of Meed Projects, said: "A clear resurgence of interest in residential projects is behind the results. Civil construction represented 75% of all awards in the UAE in the first half of the year."
Some 44 major residential contracts worth $4.8bn have been awarded this year. There has also been significant investment in road and airport development, with Dubai International airport set to increase capacity from 60 million to 90 million at a cost of $7.8bn. The consultancy also found that there was a marked increase in spending on social infrastructure such as schools and hospitals.
Ziad El Chaar, the managing director of developer Damac Properties, said: "Strong predicted growth of 4.5% this year will sustain demand for residential property; this explains the continuous solid levels of demand in the market, which is reflected in the growth in rental levels and residential values on the short and medium terms."
The UAE’s GDP for 2014 is expected to reach $404bn, compared with $390bn last year. The first six months of the year have been the construction industry’s best since 2008, according to a similar half-yearly report by MEED projects.
The UAE is expected to spend more than $300bn on infrastructure by 2030 according to a report by hospitality consultancy HVS. This includes projects such as the expansion of the Dubai metro, and the construction of the main Expo 2020 centre.Â