THE Middle East construction market could stage a recovery in 2010, but the industry focus has shifted away from Dubai, according to a new survey published last month.
Boom and Recover – Understanding the Middle East Construction Market, published by legal expert Norton Rose, found that 55 per cent of respondents who are key players within the Middle East’s construction sector expect the effects of the economic slump to fade within a year and for the sector to stage a recovery next year. As many as 94 per cent of them indicate that the downturn has had a positive effect on the availability and cost of labour and materials.
However, 71 per cent said their primary markets were now based in Saudi Arabia, Abu Dhabi and Qatar with only five per cent picking out Dubai, and 88 per cent view transport, power and water as the most likely recipients of infrastructure investment.
Meanwhile, even though many construction contracts provide for arbitration in the region, not a single respondent said they were involved with such a formal procedure, instead the 38 per cent who said they were experiencing contractual disputes as a result of the financial crisis preferred to settle through informal negotiation.
The study said few contractors are willing to risk damage to their reputation by taking on an influential developer or employer in arbitration or court proceedings (see also Legally Bound).