Construction accounts for 20% of UAE private jobs

Sector contributes 13.6% to the total value of private sector production of Dhs131.8 billion

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By  Eudore Chand Published  July 17, 2004

The construction sector in Dubai accounts for almost one-fifth of the total workforce employed in the emirate’s private sector, according to the results of the latest economic survey. This makes the sector by far the largest employer. It is also perhaps the least flexible to efforts to ensure effective emiratisation: the percentage of nationals working in the overall private sector is only 2.4%. If construction-related or generated employment in other sectors were taken into account, the industry’s direct and indirect employment level would rise beyond the one-fifth mark. The economic survey, conducted by Dubai Municipality, acknowledged the link with other leading sectors. “Construction generates a lot of direct and indirect job opportunities by way of direct and indirect links with other sectors and also increases the capacity of the economy as a whole,” said Hussain Nasser Lootah, assistant director general for planning and buildings affairs. He and Arif Al Mehairi, director of the Statistics Centre, released the survey. “The construction sector’s importance further increases as it absorbs a high percentage of the workforce, which reached 19.5% of the total number of people who work in private sector establishments in Dubai,” Lootah pointed out. The survey says that the importance of the construction industry in the emirate’s growth has been rapidly rising over the past few years – substantiating claims that the emirate is building like never before. “The data received from the results of the economic survey points out that the building and construction sector plays an important role in the economy of Dubai.” Though the municipal officials did not quantify the rate of growth in the construction sector, they did point out that it was the fastest among all sectors during 2003. “Its important role has been enhanced with the boom in the construction sector witnessed by the emirate of Dubai during the 1990s. Construction sector growth is followed by the growth in allied industrial sector (9.2%), and the hotel, banking and financial sector (8.1%).” The officials said the construction sector by value of production during 1985-1999 held third position after industrial and trade sectors. Total value of private sector production amounted to Dhs136.8 billion in 2002. Of this, the industrial sector accounted for Dhs77.4 billion, as a result of increased production in metals, equipments, machineries and chemical products. Trade contributed Dhs53.8 billion, construction provided Dhs18.6 billion followed by the banking and finance and the transport and storage sectors. However, market experts believe it could very well be on or near the top, especially under the current boom conditions, which is showing perhaps the world’s largest concentration of construction activity per square mile. They point to the substantial impact, both visible and invisible, on other sectors, especially in the hospitality and industrial. It is generally accepted that a substantial portion of the commercial or trading sector includes construction industry suppliers such as of building materials, interiors, doors and windows and others. The industrial sector too, includes producers of building materials such as cement firms, blocks and tiles producers, steel, iron and aluminium fabricating units, glass producers and paints manufacturers. Other elements of the survey show that 595 878 establishments were operating in Dubai. Of these 89.2% are located in non-industrial areas and 53.7% are concentrated in the Central Business District Those who work in the private sector make 1.1 million trips a day. Some 60.4% use company vehicles, 17% own vehicles and the rest use taxis, and public transport buses, especially those establishments that employ more than 10 people. Males constitute 89% of the expatriate workforce, but the percentage of expatriate women is increasing. The trade, construction, industry, hotels, banking and financing sectors constitute 75.4% of the total employees in the private sector. Private sector net profit stood at Dhs86.6 billion, with the commercial sector accounting for the highest share (Dhs44.9 billion) followed by the industrial, construction, banking and financing, insurance and ancillary services. The survey is considered to be one of the basic tools of comprehensive planning and development and will influence the workforce and their housing, and defining future trends of the overall development of the emirate. “There is no doubt that the results of the survey would become the basic support in conducting economic studies and research aimed at analyzing the components of the economic activity in the emirate and also for supporting the economic growth in the Emirate of Dubai,” said Lootah. Al Mehairi said that it provides major components of the economic growth of the entire planned areas. It ascertains the size of the workforce that is benefited by group accommodation, the major locations of these types of accommodation and the method of transport.

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