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Despite the challenging economic environment impacting the global construction industry, an overwhelming majority (93%) of construction decision makers in the UAE and Saudi Arabia are confident about market conditions over the next 12 months.
Additionally, nearly 88 percent of professionals expect their firms to increase the number and value of projects undertaken during this period.
These findings are part of a recent study titled “how we build now”, which was commissioned by construction management software provider Procore Technologies.
Surveying 201 decision-makers in the UAE and Saudi Arabia, the report examines industry sentiment, digital maturity, and the challenges and opportunities companies face in their pursuit of sustainability, productivity, profitability and performance.
Harnessing the transformative power of technology
An overwhelming majority (80%) of construction decision-makers in the UAE and Saudi Arabia say these pressures have instead driven them to increase digital transformation investments over the past three years, reflecting the region’s characteristic resilience rather than being mired in economic and industry volatility to six month, more than a quarter (26%) said it had driven significant growth.
Furthermore, in the UAE, this growth appears to come after already investing heavily in technology solutions, as a whopping 20% of respondents in the country (twice the rate in Germany and France) describe themselves as digital-first businesses .
A major motivation for this accelerated digitization may be the benefits it brings to pre-construction. Regional respondents cited “implementing best practice processes and protocols prior to construction” as the most popular option for increasing their business productivity and profitability.
Technology, and construction management platforms in particular, play an important role in making this happen—helping unify teams, reduce project risk, increase visibility, and increase the chances of predictable outcomes. This is evidenced by the fact that such platforms are a key technology that 34% of UAE and Saudi construction companies plan to deploy in the next 12 months.
While many businesses are making good progress with digital transformation, there is still some way to go before all construction businesses in the region can enjoy the full digital benefits offered by a fully integrated single real construction platform.
As mentioned above, four in 10 (43%) are only now starting their journey. In terms of regional comparisons, 40% of companies in the UAE are just getting started; in Saudi Arabia, the figure is 47%.
Digital transformation goals are clearly fixed in the sights of construction business leaders already using next-generation technologies such as the Internet of Things (47%), artificial intelligence and machine learning (43%), and drones (40%) to transform their operate. This level of technology investment will further accelerate as businesses in the region plan to introduce extended reality (56%), next-generation BIM (50%), robotics (48%) and 3D printing (45%) in the region. next 12 months.
Not surprisingly, the potential for cost savings is another driver of the industry’s digital transformation, as perennial rework continues to undermine the industry’s path to profitability.
Respondents in the UAE and Saudi Arabia revealed that, on average, a quarter of the time on a typical project is spent reworking or correcting issues. This challenge can be balanced by investing in solutions that enable construction firms to more efficiently capture, integrate and standardize data, which respondents said could allow them to save more than a quarter (26%) of their organizations total project expenditure.
“Despite macroeconomic challenges and obstacles, regional resilience is evident, where job availability is not an issue. Instead, construction companies in the UAE and Saudi Arabia are focused on the key objective of maximizing profitability and ensuring timely project completion,” said Mohamed Swidan, Head of Procore Middle East and North Africa.
“Construction management platforms are becoming a key enabler in achieving this by increasing visibility into project parameters and improving decision-making for all stakeholders. It is clear that regional organizations recognize this, as approximately one third (34 %) of Middle Eastern construction companies plan to introduce construction management platforms within the next 12 months.”
Sustainability is a top priority
Sustainability has been a key theme for regional governments and businesses, following the success of last year’s COP27 in Egypt, and the upcoming one in the UAE in the final quarter of 2023. This is perhaps why Procore’s report found that the UAE and Saudi Arabia are the world’s most aware of sustainability challenges, with 91% of regional respondents saying decarbonization of construction projects will be a significant challenge over the next three years.
However, companies in the UAE and Saudi Arabia not only recognize the challenge, they are rising to it. Currently, 43% of businesses already comply with ISO 14001 – Environmental Management System Standard, and another 45% intend to achieve compliance within the next 12 months.
“The construction industry understands the important role of data in enhancing decision-making, visibility, safety and customer satisfaction, and promoting sustainability. Continued investment in digital transformation not only improves the efficiency and financial performance of the current industry, but also equips it with The ability to adapt to unforeseen challenges and meet future expectations,” concludes Swidan.
read: Saudi Arabia’s construction sector strongest in MENA region, JLL reveals
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