What shiek's keep on their front lawns in Dubai.

Slowdown signs - UAE construction falls by 85%

MEED reported that the value of the UAE construction market fell by 85% over the course of 2008. The latest figures show that just USD 14.4 billion of contract awards were made during the fourth quarter of 2008, down from USD 98.1 billion during the same period in 2007.

Over the past 5 years, the sector has become one of the most important parts of the UAE economy. A recent report by Standard & Poor's estimated that the construction and real estate sectors account for almost half of Dubai's GDP.

Although the last two months of 2008 saw a dramatic fall in activity, the sector has suffered a steady decline throughout 2008 as projects struggled to secure financing in the wake of the global credit crisis. In total, USD 191.8 billion of contract awards were made in 2008, a 60% drop from the USD 482.5 billion of awards made in 2007.

Many schemes due to start construction during 2008 have not gone ahead, and many projects that were under construction have been put on hold. There are now USD 23.2 billions worth of projects on hold, almost 10% of the USD 249.7 billion of projects under construction.

At the start of 2008, many international construction companies hoped the UAE would be immune from the global economic slowdown. But the year's final months showed the market's fragility.