Scaling to new heights

The Middle Eastern construction industry is navigating a complex economic and resource landscape, with both opportunities and challenges that will shape the region’s future.

As the global energy landscape shifts, economic diversification continues to expand economies beyond oil dependence. Over 80% of our survey respondents to our market survey say that the Qatar National Vision, Saudi Vision 2030 and ‘We the UAE 2031’ vision will positively impact the region and the ambitious plans fuel construction growth, along with sustainability mandates and technological investment.

After the 2022 FIFA World Cup, Qatar’s growth moderated, with construction projects primarily focusing on gas expansion, industrial free zones and transportation infrastructure. The UAE continues to attract foreign investment, particularly in real estate, and its established business environment remains a competitive advantage amidst regional instability.

Saudi Vision 2030’s megaprojects, such as Neom, are propelling rapid market growth, creating high demand for labour and materials. According to the latest RICS Global Construction Monitor, Saudi Arabia is the strongest-performing nation globally, with a construction activity index of +61.

All three markets are experiencing a surge in demand for skilled labour and intensifying wage competition, especially in Saudi Arabia and the UAE, where 81% and 55% of our survey respondents, respectively, reported labour rate increases in the last six months. Labour costs are rising as the need for specialised talent grows to meet development goals.

Improving productivity and making the best use of available resources are critical to delivery. The adoption of modern methods of construction (MMC), including modular construction, is gaining traction, driven by the need for faster project timelines and sustainability targets.

Two-thirds of our survey respondents identified implementing building information modelling (BIM) and other digital technologies as an area that should be a focus for local governments. The Dubai Municipality has made strides in mandating BIM for larger projects, but a lack of skilled professionals and implementation costs remain barriers.

Sustainability is also reshaping Middle Eastern construction, with mandates for Environmental Impact Assessments and Global Sustainability Assessment System (GSAS) standards aligning with expectations for greener buildings.

Overall, the Middle Eastern construction industry is poised for transformative growth, fuelled by economic diversification efforts, significant technological investments and sustainability mandates. Qatar, Saudi Arabia and the UAE each have distinct growth patterns but share common challenges related to labour shortages, geopolitical instability and high construction costs.

As over half of our survey respondents for each market expect tender opportunities to increase in 2025 compared to 2024, strategic planning and proactive risk management will be essential for maintaining momentum and making the most of opportunities.