Middle East Biannual Construction Market Report 3Q/4Q 2024
Hot topics
Focus areas
The majority (85%) of respondents said national development and investment plans will positively impact the region.
Opportunities for the construction industry to play a key role include visions for creating a sustainable, technologically advanced built environment and infrastructure projects.
From futuristic cities, such as NEOM, powered only by renewable energy, to utilising AI-powered strategic design models to better inform development efforts, the region appears set for significant transformation.
Two-thirds of respondents identified the implementation of BIM and other digital technologies as an area where local governments should focus to improve the industry.
With numerous megaprojects planned or underway, BIM facilitates the construction process, allowing project teams to collaborate using 3D digital models. This approach supports building projects throughout their entire lifecycle — from design and documentation to construction and field support — ensuring that projects meet specifications, stay on programme and remain within budget.
BIM is already a requirement in Dubai Municipality for projects that exceed 20 stories or are larger than 20,000 sq m, including specialist buildings such as hospitals, education facilities and government buildings.
Government support could help overcome challenges hindering its adoption in the Middle East, which include a shortage of professionals skilled in BIM, insufficient time and budget for BIM planning and training and the initial costs associated with its implementation.
Just over half of respondents (58%) said incentivising private investment in public infrastructure and using standard contracts like FIDIC should be areas of focus.
One example of progress is Saudi Arabia’s new Civil Transactions Law that came into effect in December 2023 as a cornerstone of Vision 2030 to encourage foreign investment and modernise its legal framework.
The Civil Transactions Law consists of 721 Articles and is based on Sharia law principles, containing several provisions specifically addressing construction contracts.
These provisions are designed to promote uniformity in how contracts are interpreted, thereby creating a more reliable environment for contractors and investors.
Msheireb Downtown Doha - Phase 3 – Gleeds provided Quantity Surveying/Cost Management services.
Sustainability and climate change
At 66%, the vast majority of respondents said they were seeing mostly new build projects, with some refurbishment opportunities.
Several factors, such as significant growth projections for local populations and tourist numbers, require new residential and hospitality projects to keep pace with demand. Highlighting how crucial this is the 2040 Dubai Urban Plan, which anticipates that the population will double in the next 15 years.
The Middle East’s strategic global position also makes it an important economic and trade hub requiring investment in infrastructure, with logistics operators increasingly committing resources to the region.
Crown Prince Mohammed bin Salman of Saudi Arabia announced that the Kingdom plans to invest over SAR 500 billion in infrastructure projects, including airports and seaports, by the end of the decade. This initiative aims to establish Saudi Arabia as a key transport and logistics hub as part of its economic diversification strategy.
New build projects are carefully considered from a sustainability perspective, in line with the guidance of the national vision plans. Contractors seeking to carry out new projects across the region must submit an Environmental Impact Assessment — encouraging projects to be designed with environmental sustainability in mind.
New regulations include mandatory compliance with Global Sustainability Assessment System standards for all new private and public projects. These measures also put the industry on track towards constructing greener buildings and additionally help to create a mindset shift to consider the whole-life carbon of all projects.
Modern methods of construction
A slight majority (52%) of respondents said their projects use modern methods of construction (MMC).
With significant investments in infrastructure, hospitality and urban development projects, the region is starting to see the benefits of modular construction. This approach benefits from faster project completion — aiding 2030 development targets — lowering costs and aligning with sustainable development goals.
In Saudi Arabia, the government has previously initiated the Building Technology Stimulus Program to promote the adaptation of MMC in the construction industry. If megaprojects and economic diversification away from oil dependency are to succeed on budget and on time, the use of MMC should be set for further uptake.
Digital tools and artificial intelligence (AI)
With a slight majority of 52%, respondents said governments are investing enough in the digital transformation of the industry.
In order to improve efficiency across all project-related activities, from planning to delivery, both developers and contractors are increasingly looking for methods to benefit from digitisation.
The World Economic Forum claims that “the GCC is well-placed to adapt to an increasingly digital world, with many national governments investing in technology infrastructure and digital initiatives.”
© 2024 Gleeds - all rights reserved
Gleeds privacy policy | Cookie Policy | Modern slavery & human trafficking statement | Equal opportunities & diversity policy