Today's Edition
AMEINAH ALZEYOUDI (ABU DHABI)
The UAE construction industry is poised to enter a new phase of rapid expansion and change, according to Turner & Townsend’s UAE Market Intelligence Report 2025.
According to the report, the country’s strategic vision, economic diversification, and dedication to sustainable urban development are driving a vibrant and hopeful market.
The report’s survey results demonstrate how important the UAE construction sector remains to the country’s development. The outlook for the sector is optimistic despite both domestic and international obstacles, including a lack of contractors, growing labour and material costs, and ongoing supply chain strains.
According to the report, sustaining resilience and long-term competitiveness requires embracing innovation, digitisation, and the upskilling of personnel.
The UAE is seeing success with its diversification plan. In 2024, non-oil industries accounted for 75.5% of the nation’s GDP, demonstrating a strong move toward sustainable economic models.
Despite rising housing costs, inflation is predicted to remain steady at 1.9% in 2025, while the national economy is likely to rise by 4.8%.
According to the report, the main drivers of regional expansion are infrastructure, tourism and real estate. The UAE now has a construction pipeline of about $772 billion, backed by Dh59 billion in government investments. With a predicted yearly growth rate of around 6%, transport infrastructure is anticipated to be the sector with the quickest rate of expansion by 2030.
Under the UAE Energy Strategy 2050, which places a high priority on decarbonisation, renewable energy, and sustainable water solutions, the utilities and energy sectors are also accelerating. Mixed-use projects and smart cities are becoming distinguishing characteristics of the country’s changing urban environment.
Government spending on public infrastructure, especially in the areas of utilities and transportation, is anticipated to increase as oil production improves. Numerous industries will experience broader economic benefits as a result of this investment’s multiplier effect.
The UAE is still the most affordable place to build in the Middle East, despite rising expenses. According to current estimates, typical prices in Dubai and Abu Dhabi are $1,926 and $1,872 per square metre, respectively.
In 2025, labour and material costs are expected to rise by roughly 5%, and the need to train and upskill local experts will be fuelled by the growing demand for specialised talents.
Due to a declining pool of contractors, tender competition has somewhat decreased, which has caused some project delays. Resilience is still apparent, though, as seen by the Dh143 billion in contract awards made in just the first quarter of 2025. The outlook for the market is further strengthened by improved procurement practices, new laws, and a stronger emphasis on digitalisation.
Digital transformation is cited in the report as a key element in the development of construction in the United Arab Emirates. Major developments are quickly incorporating technologies like the Internet of Things (IoT), artificial intelligence (AI), and building information modelling (BIM).
More cooperation, increased project efficiency, and the advancement of sustainability objectives are all made possible by these technologies.
