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Construction contributes over 19pc of private sector jobs

DUBAI - The booming construction sector has emerged a major contributor to the private sector job market in the UAE. According to a recent economic survey by the Dubai Municipality, the sector accounts for close to 20 per cent of the total private sector jobs available in the country.

The survey results also show that the sector contributes nearly 14 per cent of the total private sector's contribution to the economy which was estimated at Dh136.8 billion in 2002. The exact value of the construction sector's contribution to the economy is not available for the year 2003, however, in 2002, it contributed Dh18.6 billion, while the industrial sector and trade contributed Dh77.4 billion and Dh53.8 billion respectively.

Although a major engine of growth for the local economy, the number of nationals working in the sector has been very low. In reference particularly to Dubai's economy, the survey has said that the construction industry plays a key role in the rapid economic growth of the emirate. Apart from the direct employment creation, the fast paced growth experienced by the sector during the recent years has had a multiplier effect on other sectors of the economy. The survey acknowledges the growing role of the sector in the overall economic growth of the country and its various linkages to employment, income and the gross domestic product. The sector, according to the economic survey has direct and indirect linkages to other economic activities in the country. The impact on suppliers of construction material, interior and exterior decoration items, furniture, electrical fittings, steel, bricks, pre-fabricated items etc are more visible.

The fast growth of the sector in the recent years has brought unprecedented demand for construction material leading to the cement factories in country running at full capacity utilisation levels for the past several months. With the ongoing boom, the UAE market demand for cement is about 2 million tonne short of local supplies. While the total annual production by some 9 local factories is estimated at eight million tonnes, the offtake is estimated at over 10 million tonnes. The spill over effect of the growth in the sector is also seen in growing capacity utilisation and better price realisation by cement and other building materials companies in the region, said an industry analyst. For example the Omani cement industry was in the focus in the recent months for their growing exports to the UAE. Fuelled by the demand from UAE, Omani market also began to experience higher prices and shortages which eventually compelled the authorities to ban the imports.

There are other sectors of the economy such as hospitality, real estate and retail where the impact of the construction sector is less visible, however, has indirect linkages contributing to higher volumes, margins and employment levels.