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.

'If you are 100 per cent in Dubai with nothing outside you are dead,' he said in an interview. “What does it mean if you are dead? If you are a construction company and you pay 10,000 or 20,000 people, and you do not get any work because there’s an abundant supply of buildings, you are going to be bankrupt,” he stated.

The UAE's real estate and construction sectors have been badly hit by the downturn. A recent report suggests they have seen the biggest declines in the Middle East region.

Some 566 projects have been shelved or cancelled in the country – the majority of which are in Dubai – according to the research house Proleads.

According to Tabari, Dubai real estate operators were likely to face more difficulties over the coming months. “We had hundreds of real estate developers, but these are not going to exist anymore, that’s a simple fact,” he was quoted as saying.

“There’s going to be consolidation or they’re going to go out of business, because they’re not going to make their payments. We’re going to see less and less developers in this business; it will be an orderly exit.”

Tabari said the company was looking to buy two companies in Saudi Arabia, at a combined value of up to $400 million, during the first quarter 2010. He has already said that two planned acquisitions in Kuwait and Qatar will cost $40 million to $55 million.