Dr Ayoub Kazim
GCC property sector facing 500,000 manpower gap
Dubai, April 19, 2014
The GCC’s construction and real estate sectors are facing a combined manpower shortfall of up to 500,000 heading into 2015, a report said, adding that building and construction project management skills are most lacking among senior levels.
Real estate project financing, property pricing and appraisal, real estate evaluation, property market analysis and brokerage are also key skills in demand, according to the findings of the Workforce Planning Study, which was commissioned by Dubai International Academic City (DIAC), the world’s largest Free Zone dedicated to higher education, and conducted by Deloitte.
The resurgent construction market has also provided a need for skilled trades such as HVAC, plumbing and electrical engineering, the report noted.
Fifty-four per cent of companies believe that design engineering skills are lacking among mid-level professionals, followed by civil engineering skills. Among entry level employees, health and safety skills were identified as most lacking.
The Workforce Planning Study surveyed over 2,400 students across 17 markets in the Middle East, Africa and Asia, as well as a cross section of companies. It is the region’s most comprehensive, independent study regarding workforce skills gaps within emerging markets.
The study is aimed to help empower students and graduates by providing a better understanding of the employment prospects in the UAE market. Similarly it should inform employers about where there are potential skills gaps, enabling them to make decisions around recruitment and training programmes.
The real estate and construction sectors contributed 21 per cent of Dubai’s growth in Q1 2014, according to the Dubai Economic Outlook report, and accounts for 7.8 per cent of the Emirate’s overall GDP.
Dubai has concluded the year 2013 with real GDP growth estimated at 4.7 per cent according to the Dubai Economic Department (DED). Current forecasts show that Dubai expects to add 100,000 new residents per year, according to the Dubai Statistics Centre, and annual tourist arrivals that are expected to more than double to at least 20 million under the tourism vision 2020.
In addition, Dubai’s winning the bid to host the Expo 2020 is expected to be a major catalyst for development across all segments. HSBC estimates that about 45,000 new hotel rooms will be needed for the event, at a cost of more than Dh31 billion ($8.4 billion). The total infrastructure works for Expo 2020 is estimated at Dh12.54 billion, producing a large demand for talent and skilled workers to decent on the UAE for job opportunities.
The influx of expatriate workers required to meet this demand would primarily affect the residential property segment, which has already seen a jump of 23 per cent year-on-year (YoY) in rental rates. In light of that, Oxford Economics estimates that securing the Expo will create more than 277,000 job opportunities in the UAE between 2013 and 2021; with the majority of the new jobs being in the construction and tourism sectors.
The sector growth has been highly supported by strong public spending on infrastructure across the GCC, especially with governments across the GCC looking to diversify their non-oil sectors. The real estate sector has witnessed regulatory support by the governments, who recently opened up the real estate sector to foreigners allowing them to own and lease properties.
Dr Ayoub Kazim, managing director of DIAC said: “The growth in the property and construction sectors is driven by strong economic and demographic fundamentals, and robust government spending. Yet, high attrition rates among expatriate labour force and lack of skilled labour are causing an increased labour cost, which amounts to up to 25 per cent of construction costs.”
“Furthermore, new green building standards have been developed in the GCC, focused on increasing energy efficiency and environmental sustainability. The continued growth of the construction industry will depend on its ability to address skill gaps and invest in new talent required to support technological developments,” he added.
First quarter research from real estate advisers JLL reveals residential, hotel, retail and industrial sectors experienced strong growth, with the residential market ending 2013 strongly with prices increasing 22 per cent, and average rents increasing 17 per cent YoY, further contributing to the construction and real estate sector’s growth.
Craig Plumb, head of Research at JLL Mena said: “Dubai’s momentum from 2013 has carried through into the first quarter of 2014. The residential sector is leading the way with continued strong growth in both rentals and prices, while Dubai remains one of the world’s strongest performing hotel markets.”
“Office rents have increased in prime locations in Q1, but the market remains extremely selective. Increased rents and reduced choice in the prime locations may lead to a more general recovery of the office market going forward,” he concluded. – TradeArabia News Service