Top 10 Emerging Trends in the Construction Industry

Posted on 9th April 2017 in Articles

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The GCC construction industry has seen important changes in the past couple of years, requiring governments and companies to come up with new and better ways to do business to deliver the pipeline of projects.

Some of the trends we see catching up in the GCC region’s construction industry and some of the developments which will have an impact in the construction industry include:

  1. More Public-private partnership (PPP) projects coming to the market - It has been announced that all future power plants in Saudi Arabia will be developed on a PPP basis. Similarly UAE, Oman and Kuwait plan to develop more power and water projects with private sector participation. In the building sector, we are also seeing governments inviting private sector participation in developing projects like car parks, community centers, etc.
  2. Renewable energy targets – each GCC Country has decided to diversify their energy mix by including more renewable energy sources, mainly solar. One of the initiatives worth mentioning in the UAE is the Dubai Clean Energy Strategy 2050. As per timelines set, 7% of Dubai energy will come from clean energy sources by 2020; 25% by 2030 and 75% by 2050. Some of the programs already initiated to achieve these ambitious targets include the Shams Dubai which is aiming to have solar panels on every rooftop by 2030, usage of smart grids, smart meters etc. In a similar manner, each of the GCC Countries have set definite timelines with targeted capacity for incorporating renewable energy into their energy mix.
  3. In the power distribution sector, Governments are also showing a growing interest in digital and smart technologies. In November 2016, the Bahrain Electricity and Water Authority agreed to partner with Siemens to modernize its grid infrastructure. The Qatar General Electricity and Water Corporation is partnering with Belgian consultancy Elia Grid to develop smart grid expertise.
  4. We see the Mining sector getting more focus in KSA and Oman. In its efforts to boost the mining sector, the government of Oman established a new entity called Mining Development Oman (MDO) which will carry out both downstream and upstream activities which include an exploration and extraction process. The company also plans to collaborate with the Omani private sector, whether as a partner, contractor, supplier or promoter of projects. Saudi Arabia aims to establish the mining sector as the third pillar of the economy, creating options for local mining companies to capitalize on the opportunity. Saudi deputy crown Prince Mohammed Bin Salman recently said the kingdom held 6 percent of the world’s uranium reserves, which he believes could be “another oil” to exploit. Currently, the country only uses 3 to 5 percent of its mineral wealth. Under the recently unveiled Saudi Vision 2030 plan, the mining sector’s contribution to GDP would increase by SAR 97 bn, which is 18,000 times more than current revenue. Saudi Arabian Mining Company (Maaden) has announced a SR24 bn phosphate fertilizer plant project during late 2016, adding a further 3 million tonnes per year production capacity by 2024.
  5. In the Buildings sector, the use of 3D printing in Dubai's construction sector will increase by 2%, starting on 2019 up to 25% by 2030. 3D printing will make a huge impact in construction by lowering costs and reducing the time it takes to implement projects. It will also help reduce manpower requirements as well as waste generated from construction that can be harmful to the environment. Dubai 3D Printing Strategy, which aims to make Dubai a global capital of 3D printing technologies by 2025, will focus on three major sectors: construction, medical products and consumer products. The construction and building sector will focus on lighting products, bases and foundations, construction joints, facilities and parks, buildings for humanitarian causes and mobile homes, in addition to galleries, stores and residential villas. The value of 3D printing technology-based construction sector in Dubai is expected to be about Dh3 billion by 2025.
  6. Numerous mergers and privatizations planned or underway especially in KSA and UAE, more specifically in Abu Dhabi in almost all sectors including oil & gas, education, power and water, banking, marine etc.Some of the big valued tickets include:In UAE
    • Mubadala-IPIC
    • NBAD-FGB
    • Adma opco-Zadco
    • Khalifa University-Masdar Institute-The Petroleum Institute
    • Abu Dhabi National Tanker Company (ADNATCO)-Petroleum Services Company (ESNAAD)-Abu Dhabi Petroleum Ports Operating Company (Irshad)
    In KSA
    • 5% stake sale in Saudi Aramco
    • Saline Water Conversion Corporation (SWCC)
    • Saudi Airports Privatization
    • Saudi Postal Corp Privatization
    The near future will reveal what will happen to the projects planned by these entities individually and the impact on their future projects once merged/privatized.
  7. Transportation is one sector which is expected to see some innovation in the next few years especially in the UAE. UAE has announced two Hyperloop projects (Dubai-Abu Dhabi and Abu Dhabi-Al Ain), both currently in the study stages. Hyperloop will enable passengers to travel between the emirates at 1,200 kilometers per hour. As per Dubai’s smart self-driving transport strategy, twenty-five per cent of transportation in Dubai will be smart and driverless by 2030. It is already announced by Dubai’s Roads and Transport Authority (RTA) that Dubai’s skies are set to be teeming with driverless flying cars by July 2017, in what will mark another world’s first for the city. Emaar is aiming to connect various Dubai Downtown landmarks through the driverless transportation system and also Dubai Creek Harbour in the future. It is also announced that Dubai’s Bluewaters development will deploy driverless bus network to transport people around and within the district. Dubai has also started the test run of driverless mini-buses, vehicles and boats, in addition to considering driverless express shuttle buses and taxis.We look forward to witness other alternative and cost-effective transport systems incorporating revolutionary technology delivering faster, safer, more sustainable and smoother services.
  8. Use of technology in the construction sector is in the rise, especially Building Information Modelling (BIM), Collaborative Project Management platforms, online project tracking portals (like Ventures ONSITE, among others, to create a more efficient construction sector.
  9. Housing is one area where there will be lot of activity for many years. Some of the project trends we expect to see in the housing sector are walkable communities, affordable housing and high performance buildings.
  10. In the oil and gas sector, most of the minor as well as operation and maintenance (O&M) contracts are likely to be optimized through the implementation of blanket contracts.

About Ventures ONSITE

A product by Ventures Middle East, Ventures ONSITE has been a market leader in tracking construction projects for more than 15 years. The subscription-based service provides in-depth and up-to-date coverage of key Middle East and African (MEA) construction projects and information of companies and decision makers involved. In addition, Ventures ONSITE allows its users to convert the data into statistical charts and graphs, making it a critical decision-support tool for individuals, companies and organizations that directly or indirectly target the region’s construction industry.

Ventures ONSITE's comprehensive data bank will not only help you find and select the right projects for your business, but also provide a chance to explore project opportunities in new countries or industries.

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