The prolonged recovery of UAE's Construction and Real-Estate Industry from recession during 2009-2013(A survey for CONSTRUCTION PROFESSIONALS)

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Introduction

Since the beginning of the millennium until 2008, UAE’s expansionary economic policies had led its GDP to grow exponentially from $104billion in the year 2000 to $314billion in the year 2008 with an impressive average real inflation rate of 12% per annum. This three fold increase was mostly due to its the then booming real estate and construction industry that allowed UAE to achieve the title of being the only nation in the world to have achieved such remarkable growth.

However in 2009, soon after the 2008 Great Recession in the USA, the economy of the UAE plummeted as the GDP dropped to $270billion. Amongst all sectors, the construction and the real estate sector were the greatest contributors to the decline of the economy, as their growth rates plunged to -20% in 2009. In addition, UAE, chiefly the emirates of Dubai and Abu Dhabi, had developed their housing and construction industries with leveraged tall towers, houses and hotels creating a massive real-estate bubble. The 2008 Great Recession, believed to have begun in the US chiefly after the Lehman Brothers’ demise, greatly impacted the UAE economy as the USA was a major trading partner and many construction projects were financed by US based financial institutions.

Graph indicating GDP growth by sector

Although the 2008 Great Recession had a grave impact on UAE’s economy, all of its industries recovered from the recession by 2010 except the construction and housing industry. For nearly 4 years, from 2009 till May 2013, the construction and real estate industries underwent a period of economic stagnation and deflation that caused UAE to have a low average inflation rate of 0.9% in 2009-2013. Hence through this investigation, I wish to explore the reasons why the economic policies of the UAE were ineffective in recovering the construction and real-estate industry.

Thus my research question: To what extent have the economic policies, which have been adopted in the UAE during 2009-2013, helped recovering its construction and real-estate industry from recession?

Therefore, I would be grateful if you could spare a few minutes to kindly fill out this quick survey to the best of your knowledge.

Shailesh Patro

A Grade 11 student currently pursuing the IB diploma at the American Embassy School

This research (IB Extended Essay) is being conducted for the partial fulfillment of the International Baccalaureate diploma

Basic Information

1. Name: *

2. If you choose yes, your name will not be published in this extended essay *

Yes
No

3. Company: *

4. Your current job position: *

Questionnaire Survey

6. Please rank the years when it was most difficult to find jobs in the UAE construction and real-estate industry during 2008-2014
(1 being most difficult) *

2008
2009
2010
2011
2012
2013
2014

Comments:

7. How would the following construction roles rank in terms of demand during recession of the UAE construction industry between 2009-2013? (1 being the role with the greatest demand during the recession) *

Mason/Labor(unskilled)
Foreman
Crane Operator/Steel fixer
MEP manager
Architect
Project Manager

8. Percentage drop in the recruitment of construction professionals in UAE for the years 2008-2014 *

	2008	2009	2010	2011	2012	2013	2014
Mason/Labor(unskilled)	Mason/Labor(unskilled) 2008	Mason/Labor(unskilled) 2009	Mason/Labor(unskilled) 2010	Mason/Labor(unskilled) 2011	Mason/Labor(unskilled) 2012	Mason/Labor(unskilled) 2013	Mason/Labor(unskilled) 2014
Foreman	Foreman 2008	Foreman 2009	Foreman 2010	Foreman 2011	Foreman 2012	Foreman 2013	Foreman 2014
Crane Operator	Crane Operator 2008	Crane Operator 2009	Crane Operator 2010	Crane Operator 2011	Crane Operator 2012	Crane Operator 2013	Crane Operator 2014
Project Manager	Project Manager 2008	Project Manager 2009	Project Manager 2010	Project Manager 2011	Project Manager 2012	Project Manager 2013	Project Manager 2014

9. What are the main reasons for the decrease in supply of labor in the construction industry between 2008-2013?
Please rate the reasons based on a scale of 1-5. (1 being the most important) *

	1 (most important0	2	3	4	5 (least important)
Low wages relative to cost of living	Low wages relative to cost of living 1 (most important0	Low wages relative to cost of living 2	Low wages relative to cost of living 3	Low wages relative to cost of living 4	Low wages relative to cost of living 5 (least important)
Emiratisation	Emiratisation 1 (most important0	Emiratisation 2	Emiratisation 3	Emiratisation 4	Emiratisation 5 (least important)
Small scope for improvement	Small scope for improvement 1 (most important0	Small scope for improvement 2	Small scope for improvement 3	Small scope for improvement 4	Small scope for improvement 5 (least important)
Poor work environment, including all forms of health and safety concerns	Poor work environment, including all forms of health and safety concerns 1 (most important0	Poor work environment, including all forms of health and safety concerns 2	Poor work environment, including all forms of health and safety concerns 3	Poor work environment, including all forms of health and safety concerns 4	Poor work environment, including all forms of health and safety concerns 5 (least important)
Better Opportunities outside of UAE	Better Opportunities outside of UAE 1 (most important0	Better Opportunities outside of UAE 2	Better Opportunities outside of UAE 3	Better Opportunities outside of UAE 4	Better Opportunities outside of UAE 5 (least important)
Speculations of Political Unrest	Speculations of Political Unrest 1 (most important0	Speculations of Political Unrest 2	Speculations of Political Unrest 3	Speculations of Political Unrest 4	Speculations of Political Unrest 5 (least important)
Speculations of Economic Instability	Speculations of Economic Instability 1 (most important0	Speculations of Economic Instability 2	Speculations of Economic Instability 3	Speculations of Economic Instability 4	Speculations of Economic Instability 5 (least important)
Lack of overtime benefits and other incentives	Lack of overtime benefits and other incentives 1 (most important0	Lack of overtime benefits and other incentives 2	Lack of overtime benefits and other incentives 3	Lack of overtime benefits and other incentives 4	Lack of overtime benefits and other incentives 5 (least important)

If you have any comments or suggestion (this need not be filled):

10. Please rank the years when it was most difficult for your firm to obtain loans for construction projects.
(1 being most difficult) *

2008
2009
2010
2011
2012
2013
2014