CONSTRUCTION INDUSTRY IN UAE

The Impact of financial crisis on construction industry In United Arab Emirates

Acknowledgement

I would take this opportunity to thank my research supervisor, family and friends for their support and guidance without which this research would not have been possible.

Declaration

I, [….], declare that the contents of this dissertation/thesis represent my own unaided work, and that the dissertation/thesis has not previously been submitted for academic examination towards any qualification. Furthermore, it represents my own opinions and not necessarily those of the University.

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Abstract

In this study we try to explore the concept of the impact of financial crisis on construction industry In United Arab Emirates in a holistic context. The main focus of the research is on financial crisis on construction industry and its relation with United Arab Emirates. The research also analyzes many aspects of financial crisis on construction industry In United Arab Emirates and tries to gauge its effect on construction industry. Finally the research describes various factors which are responsible for impact of financial crisis in United Arab Emirates and tries to describe the overall effect of impact of financial crisis on construction industry.

Table of contents

ACKNOWLEDGEMENT2

DECLARATION3

ABSTRACT4

TABLE OF CONTENTS5

CHAPTER 1: INTRODUCTION6

Background of the study6

Purpose of the study7

Significance of the study7

Rationale8

CHAPTER 2: LITERATURE REVIEW10

Introdcuction10

Financial crisis and Construction Industry11

CHAPTER 3: RESEARCH METHODOLOGY14

Research Design14

Mixed Method Research14

Research Method14

Primary or secondary / Qualitative or Quantitative15

Definition of (Qualitative/Quantitative) Research15

Quantitative Research15

Sample16

Instrument (interview/ Questionnaire)16

CHAPTER 4:DATA ANALYSIS18

Competitive market18

Industry trends19

Industry life cycle21

CHAPTER 5: SUMMARY, DISCUSSION, AND RECOMMENDATIONS23

Summary23

Discussion23

Recommendations24

REFERENCES26

APPENDIX28

Construction Industry in United Arab Emirates

Chapter 1: Introduction

Background of the study

Property market has always been one of the pillars of economic growth in UAE. Residential and commercial investment activity has recently been estimated to have provided about 1.3 percentage points to annual GDP growth since the mid-nineties (National Bank of UAE, 2006). Moreover, the construction industry is considered to be one of the most important sectors of the UAE economy and this is not only because of its size. It significantly affects the country's economic growth and because of that its importance for the growth prospects of the UAE economy has never been questioned (Vlamis and Kalfamanoli, 2008).

The UAE construction sector grew quite strongly throughout the last decade. There are several factors that contributed to the exemplary growth performance of the UAE construction sector particularly after the year 2000. Of primary importance is the contribution of the EU Second and Third Community Support Framework Programmes: these provided ample funding for investment in public infrastructure (Lambrinidis et al., 2005) such as new roads and motorways, the railway network, airports, tourist sites, etc. Secondly, the organisation of the Dubai 2004 Olympic Games significantly boosted construction activity in UAE (Athanassiou, 2003).

Thirdly, a number of significant structural changes - we will refer to these institutional changes in Section 3 of this paper - and the implementation of stabilising macroeconomic policies took place in UAE in the nineties that led to low cost of financing. Thus, a decline in interest rates made mortgage loans very popular and boosted demand for privately owned housing (Karagiannis and Tsouma, ...