UAE’s construction sector set for robust growth until 2029

While attention in the Gulf has largely focused on Saudi Arabia’s project boom, the United Arab Emirates (UAE) is quietly building strong momentum of its own.

According to a new report from global professional services firm Turner & Townsend, there will be compound annual growth (CAGR) of 4.2% through to 2029, supported by a project pipeline currently valued at US$772 billion.

Meanwhile, the UAE Market Intelligence 2025 report notes that contract awards in the first quarter of 2025 in the country actually overtook Saudi Arabia by almost 50%, with a total value of AED 143 billion (US$38.9 billion).

Including planned schemes, the total value of projects underway or in preparation reaches nearly US$875bn, making the UAE as the second-largest construction market in the Middle East and North Africa (MENA) region.

As part of the report, Turner & Townsend surveyed contractors, consultants and developers in the UAE. It found that 71% of respondents reported a “warming” market, citing ongoing strength in real estate, tourism and infrastructure. Residential, mixed-use and leisure developments remain key growth areas, while transport infrastructure is expected to be the fastest-expanding segment, reaching a compound annual growth rate of 5.63% by 2030. Flagship projects include Abu Dhabi’s AI-driven Urban Loop, the AED 22 billion (US$6 billion) hyperloop link between Abu Dhabi and Dubai, and the AED 20 billion (US$5.5 billion) Gold Line metro.

Almost AED 300 billion (US$81.7 billion) worth of contracts were awarded in 2024, with 46% within the construction sector. The Northern Emirates is now the fastest-growing region, forecast to achieve 7.65% CAGR by 2030. Tendering conditions remain positive, with moderate levels of competition and steady pricing, according to the report

But challenges persist, despite the strong performance. Survey respondents cited rising material costs, a shortage of skilled labour and contractor capability constraints as ongoing risks.

When it came to sustainability, 56% reported an increase in sustainable measures on projects, while 46% noted commitments to net zero.

Turner & Townsend highlighted the growing adoption of modern construction methods, Building Information Modelling, and digital tools to manage complex project delivery and accelerated timelines.

The report also highlighted a shifting contractor landscape. Increased participation from international firms is intensifying pricing competition but also driving up standards through joint ventures that blend local market knowledge with international expertise. “The UAE contractor landscape is seeing an increase in new players, which is a result of new legislation benefitting mergers and foreign investments in the region. This is intensifying margin pressures,” the report said.

Adam Ralph, UAE country manager at Turner & Townsend said, “Our survey shows a market that’s not only growing but evolving. Clients and contractors alike are responding to the UAE’s ambitious development agenda with innovation, resilience and a clear appetite for sustainable progress.

“With strong activity across residential, infrastructure and hospitality, and increasing interest in digital and sustainable delivery, the region continues to offer significant opportunities for organisations looking to contribute to its long-term transformation.”