Saudi Arabia’s Construction Activity Index (CAI) continues to show its strongest readings in the region, as revealed in the latest Global Construction Monitor by the Royal Institution of Chartered Surveyors (RICS).
The kingdom continues to lead the industry compared to all other markets tracked globally in the third quarter of 2023. Meanwhile, the UAE remains among the best-performing countries in the world in the construction sector.
Third quarter results in 2023 across the Middle East and Africa indicate strong foundations for the construction market. In fact, construction workloads continue to rise across all sectors at a key regional level. This is particularly driven by strong growth in private residential developments. Furthermore, the 12-month forecast indicates an ongoing strong expansion in the construction sector. Therefore, most countries across the region are showing positive outlooks.
Strongest reading
Regionally, the Construction Activity Index for the Middle East and Africa noted a reading of +34 in the third quarter. This figure shows a significant improvement from +25 previously and represents one of the strongest readings for the region.
As such, this measure indicates further momentum. Thus, the Middle East and Africa currently, continue to comfortably outperform all other regions of the world.
Construction activity in Saudi Arabia and other countries
Saudi Arabia continues to show the strongest reading in the construction activity index at the regional and global levels. Elsewhere, inflation index readings were positive for Mauritius, the UAE, Oman, Nigeria, and Egypt. Each market witnessed widespread growth in construction workloads during the third quarter of this year.
At the weaker end of the index, Qatar’s construction activity index falls on the negative spectrum. This is driven by a further decline in activity across all sectors.
Read: UAE’s commercial property sector prevails in Q3 2023
Construction sector challenges in the UAE
On the other hand, construction activity in the UAE remains strong and steady. The UAE’s construction industry is among the world’s leading sectors, with a reading of +54 percent during that quarter. This marks the UAE’s strongest performance since the survey commenced five years ago.
The construction activity index recorded a very positive reading of +45 percent. Meanwhile, the private residential sector reported the strongest increase at +56 percent, with all other sectors recording positive results.
However, further growth is hindered due to labor and skills shortages as well as high material costs. Similar to other markets, the supply of skilled trades is decreasing. This also applies to other roles with high skill and experience requirements, such as quantity surveyors and managers.
Against all odds, the UAE’s construction sector demonstrates resilience through ever-increasing construction activity and new business inquiries. With all that being said, the UAE remains one of the most prominent markets in the global construction market.
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