Construction

UAE construction salaries ‘to grow by 2-5%’ this year

Growth to be slower than in 2015, says Morgan McKinley

PHOTO: Some ‘doom and gloom’ is creeping into market sentiment across the UAE as a whole, said Morgan McKinley. Credit: File photo - Shutterstock

Salaries in the UAE construction sector are expected to grow by between 2 and 5% this year, according to Morgan McKinley.

The forecast comes despite widespread uncertainty over low oil prices – but the increases are still expected to be lower than in 2015, when salaries rose by an average of 5-10%, the recruitment firm said.

A managing director for a general contractor in the UAE, with nine or more years’ experience, can expect to earn AED100,000 ($27,000) to AED105,000 a month, Morgan McKinley said. A quantity surveyor with a similar amount of experience is likely to earn AED27,000 to AED30,000.

Forecast 2016 salary ranges for other professionals working in main contracting companies can be found here.

“Demand was strong for construction professionals in 2015, particularly during the first half of the year when master developers were making a significant number of hires. Low oil prices have begun to affect government budgets throughout the GCC, however, making public spending cuts likely,” wrote Niall Hughes, Senior Consultant at Morgan McKinley in the UAE.

“The squeeze on budgets, coupled with the regional conflicts taking place, has created uncertainty within the private sector and led to several projects being put on hold. Some construction professionals have been let go when their projects ended and while many of the larger developers have pushed ahead with both existing and new large projects, the pace of hiring slowed in the second half of the year.”

But major events such as the Dubai Expo 2020 and the 2022 FIFA World Cup in Qatar are seeing continued momentum for other projects, the executive added.

“Despite the low oil prices, the private sector still needs highly skilled construction professionals – particularly those who have local GCC experience. Since these people are hard to find, employers are increasingly willing to make counter offers to retain staff who had been planning to move to a competitor,” wrote Hughes.

“During 2015, salaries increased by 5-10% across the board. Next year is likely to be a tougher environment, however, and we expect salaries to increase by 2-5%.”

Trefor Murphy, Managing Director for Morgan McKinley in the Middle East and North Africa, based in Dubai, said there was some “doom and gloom” sentiment in the UAE market as a whole, covering all sectors.

“With GDP growth for the UAE estimated to have fallen to between 2% and 3% in 2015 and oil prices averaging $US40-45 per barrel, it is not surprising that salaries stayed relatively flat last year,” he wrote.

“We… expect salary growth to drop below current levels or to remain flat for the year ahead. We are predicting that for the full year of 2016 that salaries could drop to as low at 2% or 3% below certain levels or remain relatively flat [depending] on commodity prices.”

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