Currie and Brown, experts in project management, predict that construction expenses in Saudi Arabia and the United Arab Emirates will increase this year.
After a 3% increase in 2023 and a 7% increase in 2024, the research predicts that building expenses in the UAE will grow by 2-3% and in Saudi Arabia by 5-7%. The construction industry is facing new problems as a result of these increases. To efficiently manage costs and keep projects on time, new procedures and skills are needed.
The findings are detailed in Currie and Brown’s report, "How to Navigate 2024: Balancing Challenge with Opportunity." To address the uncertainties and enhance cost-effectiveness, the report offers guidance for project teams to focus on several key areas:
- Implementing new working methods, such as modular construction, can mitigate the impact of local skills and material shortages, providing greater certainty on construction costs. Close collaboration among developers, consultants, and contractors is recommended to ensure clarity on schedules and secure skilled labor early.
- Prioritizing sustainability at every stage of development is crucial. Considering the carbon footprint of projects from inception reduces the need for future investments and leads to operational efficiencies, ultimately reducing costs and environmental impact.
- Embracing digitization, including AI and advanced data analytics, offers opportunities to enhance project ROI and anticipate and manage future challenges. Organizations should remain receptive to new technologies and collaborate to apply them where they offer the most value.
While the year 2024 does bring new difficulties to the construction sector, Managing Director Doug McGillivray of Southern Gulf stresses that there will also be possibilities for businesses and their clients. To create sustainable built environments while reducing the impact of increasing construction costs, operational savings may be realized via the incorporation of sustainability, the adoption of digital technology, and the innovation of working techniques.
The report notes that inflation remains a primary challenge, driving cost increases across every operating region. Tightening sustainability regulations, skills and material shortages, and competition for skilled staff further contribute to rising costs in the region. Despite these challenges, the report suggests that proactive measures and collaboration can help mitigate cost pressures and foster sustainable growth in the construction sector.
