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UAE construction sector shows signs of resilience amidst growing investment in technology innovation

UAE Construction survey 2019

Governance and investment in human capital vital for performance and project delivery

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Dubai, 19 August 2019: The UAE construction sector remains optimistic, with just over half (53%) expecting 6-10 percent growth next year, KPMG’s Global Construction Survey has revealed. Industry leaders surveyed in the UAE are optimistic about growth prospects, and are confident that technology and governance will play a significant role in the construction sector in the next five years.

Professionals however remain divided over whether companies in the UAE are delivering projects on time and within budget, with time (44 percent) and cost (44 percent) overruns ranking as the top hurdles facing capital construction projects.

These concerns are being addressed as the industry adopts methodologies to link governance to project outcomes. UAE industry leaders recognize that well-run projects, with good management practices and appropriate controls, are more likely to achieve broad measures of success in the future.

Sidharth Mehta, Partner, Head of Building, Construction & Real Estate, KPMG Lower Gulf, said: “The construction sector is the lifeblood of the UAE economy and it is very encouraging to see that the industry is expecting single to double digit growth this year. As the pace of disruption accelerates, leaders will have to consider implementing a three-pronged approach to rationalize governance and controls, optimize human performance and innovate with technology, to become more future-ready.”

The UAE is already seeing technological disruption in the sector, through 3D printing and automation. According to KPMG’s global findings, the use of robots in the field, unmanned aerial vehicles (UAV) and intelligent tools and equipment will continue to automate many of the less complex and high-risk tasks at the job site, leading to a leaner, more specialized and digitally enabled workforce.

Looking ahead, over 80 percent of UAE industry leaders felt that digital modular fabrication will be widely implemented within the next ten years, followed by intelligent construction equipment (56 percent) and robots (25 percent). The use of data analytics and predictive modeling will also play an important role in the next five years.

However technological investment will be useless without a strong workforce at the helm. People form the backbone of the industry, and leaders need to invest in human capital to drive overall performance and ensure on-time project delivery.

“Construction companies that continue to invest in people and implement a technology-enabled strategic road map will be well positioned to face industry disruption and improve their capital and program performance, putting them on the fast-paced track to growth”, added Mehta.

About The KPMG Global Construction Survey

Running annually since 2005, this year’s global report examines the perspectives of senior executives from 223 engineering and construction companies, as well as project owners from a variety of sectors. Industry performance is assessed across three pillars – governance and controls, people, and technology and innovation.

About KPMG International

KPMG is a global network of professional services firms providing Audit, Tax and Advisory services. We operate in 153 countries and territories and have 207,000 people working in member firms around the world. The independent member firms of the KPMG network are affiliated with KPMG International Cooperative ("KPMG International"), a Swiss entity. Each KPMG firm is a legally distinct and separate entity and describes itself as such.

For media enquiries, please contact:

Mara Carpencu

+971 4 506 5563

mara.carpencu@bpgorange.com

© 2019 KPMG Lower Gulf Limited, registered in the UAE and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. Printed in the United Arab Emirates. The KPMG name, logo and “cutting through complexity” are registered trademarks or trademarks of KPMG International.

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