A new survey conducted by Ventures Middle East Market Research Division in association with Ventures ONSITE Project Intelligence Platform reveals that suppliers, contractors and consultants in the UAE construction industry share a ‘generally positive’ outlook for the next six months.
Ventures has created the Construction Confidence Index (CCI) to examine the general sentiment of the construction sector in the UAE.
“Based on a sample of 300 respondents, 70% of which belong to companies’ senior management, covering suppliers, contractors and consultants, the CCI in UAE is positive, as it reached 65 points out of 100,” said the analyst. “This means that there is a general positive sentiment about the market conditions based on 7 averaged weighted scores including: expected business for the next six months, current labour cost compared to previous year, expected employment growth for the next six months, current contracts value, expected company’s price change for the next six months, business growth and contract volume. The study also details the CCI per company segment and per emirate of operation.”
Given the unpredictable changes of the regional economy, it is important for construction related companies to have a set of indicators to serve macroeconomic and operation management purposes by anticipating events that are likely to happen to the economy and the construction sector, added the company.
“Combining the strengths of our Ventures ONSITE Project Intelligence platform and Ventures Middle East’s Market Research Division, the Construction Confidence Index and study were a natural progression for us to give our valued clients as well as the industry another insightful tool to help their business.” Said Ahmad Kabra, CEO, Ventures Middle East.
To put the results in context, the Construction Confidence Index for sales expectation of US during the first quarter of 2018 is 72.2 while the CCI for profit margin expectations is 63.4 according to the Associated Builders and Contractors (ABC).
According to Ventures, the positive overall UAE CCI is supported by data from Ventures ONSITE showing the value of projects awarded to contractors in the first half of 2018 stands at over $31 billion, “slightly higher than the contracts awarded during the same period in 2017. In addition, improving oil price, the recent announcements made by Abu Dhabi and Dubai governments to help the business, real estate sectors etc. are expected to impact the economy as well as the construction industry in a positive manner.”
“The CCI is an ‘Early Warning’ indicator as it measures sentiment of construction contractors, suppliers and consultants, and is based on a study of past, current and future six-month business conditions.” Said Ibrahim Gerges, Market Research Director for Ventures Middle East. “There were mixed sentiments in the air with regards to the overall construction climate, so we hope this study can shed some light on the perceived direction of the industry directly from the companies in the country’s construction supply chain.”