The Saudi and UAE construction markets remain among the strongest globally, driven by solid workloads and positive sentiment, according to RICS’ Q3 2024 Global Construction Monitor.
The UAE’s Construction Sentiment Index (CSI) reached +55, its highest since 2018, while Saudi Arabia’s CSI stood at +61, a slight dip from the previous quarter but still firmly in expansionary territory. Both countries outperformed the Middle East and Africa (MEA) region’s CSI of +28.
However, challenges persist. In the UAE, fluctuating oil prices, driven by geopolitical tensions, have dampened investor confidence, leading to project delays and cancellations, especially those reliant on government or oil funding. The demand for professionals, particularly quantity surveyors, skilled tradespeople, and site managers, continues to strain the market, exacerbating labour shortages.
In Saudi Arabia, challenges include buildability issues with iconic designs, a shortage of qualified contractors, and underdeveloped local supply chains, especially for giga projects. Additionally, difficulties in securing performance securities and reliable supply chain partners persist.
Profit margins in the MEA region have fallen, with a net balance of -24pct this quarter compared to -4pct previously, though optimism remains, with +20pct expecting margin improvements in the next year.
Material costs are the top challenge (73pct), with financial constraints coming in second. Despite these pressures, both Saudi Arabia and the UAE maintain resilience, supported by strong work pipelines and positive growth prospects.
