UAE contractors' order backlog hits two-year high
Dubai, April 16, 2013
UAE contractors have witnessed a robust growth in their order backlog over the last three quarters, with the backlog growing to a fresh two-year high of Dh27 billion in Q4, 2012, a report said.
The order backlog was up 5.2% quarter on quarter and 27 per cent year on year, said the Global research report. Order backlog was boosted by a solid growth in order receipts throughout 2012, it said.
Arabtec continues to lead the race with a market share of 66.3% of the total order backlog in Q4, 2012, remaining steady when compared to its market share of 66.6% in Q4, 2011.
The report said competition is expected to affect margins of companies over the medium term while construction costs are expected to rise after having remained subdued over the past two years. Nevertheless, the uptick in the construction industry is expected to boost overall earnings to Dh74 million in Q1, 2013, up 26.7% on a QoQ basis, it said.
In terms of geography, order backlog from the UAE currently makes up the largest share for UAE contractors, standing at 38% in Q4, 2012, remaining unchanged from the level witnessed in Q4, 2011. Backlog from Qatar witnessed its market share going up to 13% in Q4, 2012 from 6% in Q4, 2011, driven by solid public sector spending in the country. Meanwhile, Saudi Arabia saw a decline in its market share from 42% in Q4, 2011 to 32% in Q4, 2012. Saudi Arabia’s share declined as bureaucratic hurdles delayed projects in 2012, the report said.
UAE’s construction sector is gearing up to grow robustly in the coming years primarily driven by its growing population that is estimated to increase to 6 million by 2015 from 5.4 million in 2010. The construction sector is projected to contribute 11.1% to UAE’s GDP by 2015 (up from 10.3% in 2011), the report said. - TradeArabia News Service