Construction boom: UAE, Saudi Arabia expect surge in project numbers and values, says report

In spite of the challenging economic environment affecting the global construction sector, a significant majority (93 per cent) of construction decision makers in the UAE and Saudi Arabia are confident about the market conditions over the next 12 months.

Additionally, nearly 88 per cent of the professionals anticipate an increase in both the quantity and value of projects undertaken by their companies during this period.

The findings are part of a recent benchmark report titled “How We Build Now,” which was commissioned by Procore Technologies, a provider of construction management software.

The report surveyed 201 decision makers in the UAE and Saudi Arabia, examining industry sentiment, digital maturity, as well as the challenges and opportunities that companies face in their pursuit of sustainability, productivity, profitability and performance.

Leveraging the transformative power of tech

Embodying the region’s characteristic tenacity, rather than caving into economic and industry volatility, the large majority (80 per cent) of construction decision makers in the UAE and Saudi Arabia say these pressures have instead prompted an increase in their digital transformation investment over the past three to six months, with over a quarter (26 per cent) saying it has driven a significant increase.

Moreover, in the UAE, this increase appears to follow considerable investments that have already been made in technology solutions as a high of 20 per cent of respondents in the country (double than in Germany and France) described themselves as digital-first businesses.

A major motivation for this accelerated digitalisation could be the benefits it brings to pre-construction. Regional respondents gave ‘implementing best practice process and protocol in pre-construction’ as the most popular choice to improve productivity and profitability within their business.

Technologies, particularly construction management platforms, play a major role in making this a reality – helping unify teams, reduce project risks, drive visibility and increase the chances of predictable outcomes. This is evidenced in such platforms being a key technology that 34 per cent of UAE and Saudi construction companies plan to deploy in the next 12 months.

Although good progress has been made by many businesses towards digital transformation, there is still some way to go before all construction businesses in the region enjoy the benefits of full digitalisation that fully integrated, one-source-of-truth construction platforms offer.

As noted above, over four in ten (43 per cent) are only now starting out on the journey. For regional comparison, 40 per cent of firms in UAE are just starting out; in Saudi the figure is 47 per cent.

The goal of digital transformation is clearly fixed in the sights of construction business leaders who are already using next-generation technologies like internet of things (47 per cent), artificial intelligence and machine learning (43 per cent) and drones (40 per cent) to transform their operations. That level of technology investment is set to accelerate further with businesses in the region planning to introduce Extended reality (56 per cent), next generation BIM (50 per cent), robotics (48 per cent) and 3D printing (45 per cent) in the next 12 months.

Unsurprisingly, the potential for cost savings is another driver of digital transformation in the sector as the perennial proliferation of rework continues to derail the industry’s path to profit.

Respondents in the UAE and Saudi Arabia revealed that, on average, a quarter of a typical project’s time was spent on rework or rectifying issues. This challenge could be balanced out by investing in solutions that enable construction firms to capture, integrate, and standardise data more efficiently which respondents stated would potentially enable them to save over a quarter (26 per cent) of their organisation’s total spend on projects.

“Despite the existing macroeconomic challenges and obstacles, there is a clear regional resilience and the availability of work is not a concern in this regard. Instead, construction companies in the UAE and Saudi Arabia are focused on the crucial objective of maximising profitability and ensuring timely project completion,” said Mohamed Swidan, head of the Middle East and North Africa at Procore.

“By enhancing visibility into project parameters for all stakeholders, and improving decision making, construction management platforms are emerging as a key enabler of this objective. It is clear that regional organisations recognise this, as approximately a third (34 per cent) of Middle East construction firms are planning to introduce construction management platforms in the next 12 months.”

Sustainability a top priority

Following the success of COP27 in Egypt last year, and with the upcoming edition of the conference set to take place in the UAE in the last quarter of 2023, sustainability has been a key theme for regional governments and businesses. This is perhaps why Procore’s report found the UAE and Saudi Arabia to be the most globally aware of the challenges pertaining to sustainability with 91 per cent of regional respondents saying decarbonisation of construction projects will be an important challenge within the next three years.

However, firms in the UAE and Saudi Arabia are not only recognising the challenge – they are also rising to address it. At present, 43 per cent already follow the ISO 14001 – Environmental Management System standard, and a further 45 per cent intend to become compliant within the next 12 months.

“The construction industry understands the vital role of data in enhancing decision-making, visibility, security, and client satisfaction, as well as promoting sustainability. The continued investments in digital transformation not only enhance the industry’s efficiency and financial performance in the present, but also equip it with the capability to adapt to unforeseen challenges and meet future expectations,” concluded Swidan.

Image credit: Getty Images

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