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Construction costs in key GCC markets are likely to rise with a 2 to 5 per cent jump expected in the UAE costs and 5 to 7pc in that of Saudi Arabia this year, according to a report by Currie & Brown, a world-leading provider of cost management, project management and advisory services.
This is mainly due to rising demand that will add pressure to the limited availability of skilled labour and key materials, it stated in its report ‘Building a resilient future: Adapting to uncertainty in 2025.’
The boom in key sectors, such as digital infrastructure and renewable energy, offers obvious opportunities for growth.
But the industry still faces geo-political and economic uncertainty, which will continue to disrupt supply chains and increase prices, it stated.
As per the report’s findings the global construction costs too are set for a jump in 2025 with the growth figure hovering at 7pc.
According to Currie & Brown, costs will rise across all regions and most markets, driven by a shared set of factors.
There will be significant growth and opportunities across the Middle East, driven by government-led investment in infrastructure and nationally important transformative projects.
However, rising demand will add pressure to the limited availability of skilled labour and key materials, leading to price increases, it added.
Despite a levelling off of inflation and the stabilisation of interest rates, growing protectionism, political volatility, and conflicts in various parts of the world make for an unsettled and unpredictable outlook. These factors will continue to put pressure on the cost and supply of materials and labour, it stated.
The rapid and inexorable evolution of digital technology in general, and AI in particular, will continue to transform industries worldwide, said Currie & Brown in its report.
It will create opportunities for growth. But that growth will also generate intense competition for scarce and specialised materials (notably for projects in the technology sector), adding significantly to global construction costs, it stated.
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