May EN 2019

13 The Kingdom of Saudi Arabia and the United Arab Emirates are at the forefront of spending on infrastructure projects across the region, with Expo 2020 Dubai’s projects estimated at AED 15 billion. The report doubles on the fact that the building material sector is one of the main sources of income for the building and construction sector in the region. Therefore, the higher the volume of investments in the sector is, the more positive economic and real estate growth will be. Positive indicators Al Mazaya said that the region's construction materials industry heavily relies on the real estate industry, despite its volatilities. Current data indicate that the total value of construction projects in Dubai during the period from 2014 through 2030 will hit to the tune of $870 billion. The sector plays a significant role in ensuring success for the economic diversification strategy, as it is closely linked to primary sectors such as the aluminium, cement and finance sectors. Government endeavours and plans appear to be supportive and stimulating for the industrial sector, including manufacturing industries. The UAE federal government seeks to raise the contribution of the industrial sector to GDP to 16% by 2021 and 20% by 2025, targeting new investments of about $70 billion. Infrastructure Development Al Mazaya Holding said in its weekly report that building material prices are currently hitting significantly low levels matching prevailing real estate rates. Prices of construction materials play a direct role in accelerating or decelerating the completion of real estate projects, the report indicated. The report evaluates current infrastructure projects in the region at about US$1.1 trillion. Roads and bridges developments account for the majority of projects currently being implemented by the region’s governments in line with their comprehensive development plans. Mazaya Monthly Real Estate Report - Week 4 - May 2019 Oversupply Al-Mazaya report added that signs of decline in the real estate markets, in general, have reflected negatively on the pace of demand and prices of building material in the countries of the region, due to an excessive property glut that goes beyond market needs. Therefore, the report adds, the domestic building material sector should develop its own innovative tools to increase exports and reduce imports of foreign material which are highly likely to deal a heavy blow to the domestic industry should the current state of dumping and oversupply persist.