Construction Costs in GCC Expected to Rise in 2025
Saudi Arabia/UAE: Construction costs in key GCC markets are projected to increase in 2025, with the UAE expecting a rise of 2% to 5% and Saudi Arabia anticipating a 5% to 7% increase, according to a report by Currie & Brown. The report highlights rising demand in sectors such as digital infrastructure and renewable energy, leading to pressures on skilled labour availability and key materials. Despite economic stabilisation in terms of inflation and interest rates, geopolitical uncertainties and global supply chain disruptions continue to impact costs. Global construction costs are also forecast to rise by approximately 7% in 2025 due to factors such as increased government investment in infrastructure and transformative national projects. Labour shortages are expected to intensify, particularly in high-growth sectors, pushing up costs further.
The report emphasises the need for adaptability and risk management strategies to navigate economic uncertainties. It suggests expanding supplier networks, addressing labour shortages through early-stage planning and training, and leveraging data-driven cost analysis to improve project feasibility. Alan Manuel, Group CEO of Currie & Brown, stated that cost inflation remains a constant challenge for the construction industry, with resilience being key to long-term success. Doug McGillivray, Managing Director for Southern Gulf, noted that while the region presents significant opportunities, clients should proceed cautiously, implementing robust risk management strategies to mitigate cost fluctuations and potential delays.
Source: Zawya