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

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Acknowledgement

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

DECLARATION

I, [type your full first names and last name here], declare that the contents of this dissertation/thesis comprise my own unaided work, and that the dissertation/thesis has not before been submitted for learned written test towards any qualification. Furthermore, it represents my own attitudes and not necessarily those of the University.

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Abstract

The aim of this paper is to present a review of the developments in the UAE construction sector since the year 2000.The UAE construction sector - one of the most dynamic sectors of the UAE economy - grew quite strongly over the last decade. The paper follows a rather more descriptive approach to examine and analyse the factors that significantly boosted construction activity in UAE since the year 2000. It also studies and critically analyses the extent to which the UAE macro-environment (legal-political, economic, socio-cultural, technological and demographic), as part of a broader nexus of domestic and global dynamics, affects construction companies.

Table of Contents

ACKNOWLEDGEMENT2

DECLARATION3

ABSTRACT4

CHAPTER 1: INTRODUCTION7

Background of the Study7

Problem Statement8

Aims and Objectives9

Significance of the Study9

Organization of the Paper11

CHAPTER 2: LITERATURE REVIEW13

A review of developments in the UAE construction sector since 200013

CHAPTER 3: METHODOLOGY33

Research Method33

Research Design33

Literature Selection Criteria33

Search Technique34

Keywords Used34

Theoretical Framework34

Analysing trends in the UAE macro-environment and its effect on the UAE construction sector34

Legal-political environment35

Economic environment40

Socio-cultural environment42

Technological environment43

Demographic environment44

Global environment44

CHAPTER 4: OUTCOME AND DATA ANALYSIS46

Impacts And Challenges46

Construction Output46

Public Sector Spending47

Business Finance and Loss of Confidence47

Jobs & decrease of Skills48

Procurement49

Fraud50

Education and Training53

SWOT55

CHAPTER 5: CONCLUSION57

REFERENCES63

APPENDIX67

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 prime significance is the assistance of the EU Second and Third Community Support structure Programmes: these supplied plentiful funding for buying into in public infrastructure (Lambrinidis et al., 2005) such as new streets and motorways, the trains mesh, 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 ...