Construction sector in the UAE witnessed a massive drop in costs during the past 12 months. Prices of most materials dropped by more than half compared to 2008.

Producers and distributors said they experienced a difficult year as reduced cost coupled with falling demand led to severe drop in revenues.

Most affected were ready-mix companies. Many of them had to cut their production by more than 50 per cent and send several staff on leave in order to reduce operational cost. (Read more..)

The construction industry in Dubai has no chance of recovery in 2010 and the emirate’s real estate operators too were likely to face difficulties over the coming months, said an industry expert.

Those construction companies which are solely operating in the Dubai are in for big trouble, Khaldoun Tabari, vice chairman and CEO of  Dubai-based engineering contractor Drake & Scull International, was quoted as saying in Arabian Business. (Read more..)

On demand’ guarantee bonds are a typical form of contractual security in the UAE construction industry, particularly on large projects. Their use in theory, is to afford the employer with secured funds from a surety, in the event the defaulting party does not perform under a contract or becomes insolvent.

Prior to the onset of the liquidity crisis last year, the general attitude of an employer (as a beneficiary) would have been to threaten the encashment of a bond to impose commercial pressure on a contractor to perform. A call upon an on-demand bond would have been made if strictly necessary e.g. in the event of material or persistent default. (Read more..)

It is undeniable that UAE is now facing the onslaught of the global financial crisis. Although UAE’s oil revenue has cushioned the impact of the crisis to some extent, the speed in which the impact of the crisis is spreading across the real estate and construction industries, particularly in Dubai, is unprecedented.
The number of construction projects being scaled back or even suspended is on the rise. Consequently, we have been receiving an increasing number of enquiries and instructions from employers and contractors involving suspension and termination issues. Inevitably, some projects will fall into dispute whenever a party decides to suspend or terminate the contract. A dispute or a chain of disputes may occur at any level, be it between the master developers and sub-developers, sub-developers and its consultants or contractors, or down to the level between the contractors and its sub-contractors and suppliers. (Read more..)

by Michael Pilkington and Peter Smith

As the economic slowdown continues to affect the Dubai construction market, there is no doubt that for much of the industry one inevitability will be an even greater squeeze on cashflow. (Read more..)

by Omar Al Saadoon

The title of this article does not suggest the fear of stakeholders in the construction industry in the UAE or any other country affected by the global downturn is wholly irrational. No, on the contrary, the fact the UAE is currently experiencing a dramatic and unprecedented slowdown in its construction industry (which apparently accounts in part for Dubai’s first budget deficit in 2009) is symptomatic of the global fear of the instability of global financial markets and the ability of banks to lend to the public and each other. It is difficult to guage the actual effect of the downturn on the local construction industry given the UAE does not publish its GDP date on a quarterly basis. (Read more..)

by David Dale

 By Samer H Skaik  

  Introduction  

Strategic thinking has engaged the brains of business leaders for centuries. Many books and researches have been developed to cover the strategy subject because of its importance. Organizations always seek to adopt dynamic and effective strategic management to secure proper growth and remain competitive.  

Strategic management is necessary to any organisation particularly those working in construction where there is a rapidly changing environment with adverse competition and surprises which may act as serious threats to organisation stability.  

(Read more..)