The top 5 business activities to consider in the construction industry

The UAE’s construction industry, valued at USD 38.99 billion in 2023, is the backbone of the country’s economy. It’s not only shaped the skyline, but also underpinned the diversification of the economy and enabled the unprecedented growth of the country’s tourism, real estate and manufacturing industries.

By 2028, the industry is projected to reach USD 49.40 billion, a solid growth rate of 4.7%, and a remarkable resurgence in the face of the setbacks caused by the global pandemic. Now with a wave of major pipeline projects such as the USD 11 billion Etihad rail, the USD 5.9 billion hyperloop between Dubai and Abu Dhabi and the USD 1.3 billion luxury resort project on Al Marjan island in Ras Al Khaimah revitalising the sector, there is renewed optimism in the market.

As local developers seek innovative construction materials, efficient supply chain solutions and expert consulting services, those that can provide these essentials are poised for success.

This article looks at emerging trends and the top 5 business activities to consider in the construction industry.

Building material trading

Driven by the country’s relentless and ambitious infrastructure development, the UAE’s hardware & building materials market generates a revenue of USD 5bn.

The robust demand for high-quality building materials propels a complex and globally connected supply chain. A significant portion of these materials is sourced from leading manufacturing hubs worldwide, including advanced construction composites from Europe, cutting-edge glass technologies from Asia, and durable steel and cement from various global suppliers.

Once sourced, these materials traverse a well-established logistics network, often entering through the UAE's major ports. From there, the materials are efficiently distributed across the country to meet the demands of diverse construction projects.

Prominent companies such as Emirates Building Systems, RAK Ceramics, Gulf Cement Company, and Danube Building Materials dominate the market. However, there are lucrative opportunities for emerging players to carve their niche and contribute to the industry's evolution.

A keen understanding of the diverse types of building materials in demand is crucial. Beyond traditional components like cement and steel, there's a surging interest in innovative materials such as eco-friendly insulation, energy-efficient glass, and advanced construction composites. Tapping into the growing preference for these materials is the key to entering this space.

Starting a trading business demands a strategic approach, beginning with a keen analysis of market demand. From there, a good understanding of the preferences for diverse manufacturing materials is essential. Look at where the industry is heading and who the key players are, then build robust connections with reputable suppliers and manufacturers and ensure an efficient and cost-effective supply chain.

The UAE’s free zones, with their simplified import/export procedures and exemption from customs duties provide a huge benefit in this regard.

Manufacturing innovative building materials

As well as the trading of new and innovative building materials, there is also huge scope for their manufacture in the UAE.

Innovation in building materials is an area where the construction industry is witnessing a transformative shift driven by emerging trends that prioritise sustainability and smart technologies. Sustainable materials, ranging from recycled composites to eco-friendly insulation, are gaining prominence as environmental consciousness gains more importance and recognition.

Manufacturers are increasingly adopting eco-conscious practices, reducing carbon footprints, and promoting circular economies.

Simultaneously, the integration of smart technologies into building materials is reshaping the construction landscape. From self-healing concrete that addresses structural wear to energy-efficient glass with embedded sensors, these technologies enhance efficiency, durability, and overall building performance.

Specialised construction equipment trading

The UAE's construction ambitions are known for their extravagance and distinctiveness and to make these projects a reality, it demands specialised construction equipment. Companies need solutions to build faster, smarter and more sustainable buildings and as the industry evolves, cutting-edge technologies like autonomous drones, advanced 3D printing, and IoT-enabled machinery are not just desirable but essential.

These innovations have found practical application in monumental projects such as the Dubai Expo 2020, the construction of the Museum of the Future and many other projects and huge resorts in Ras Al Khaimah, are becoming increasingly integral to current and future projects. Drone technology is already being embraced in building sites throughout the UAE, and is fast becoming standard practice. Similarly, 3D printing has already been used for office buildings, villas, and research facilities throughout the country and has the potential to significantly disrupt traditional construction norms across the country.

Entering the trading arena for this type of specialised construction equipment has huge potential for success and as a new phenomenon, the market is relatively untapped.

Supply Chain Management for Building Materials

Logistics and improving supply chains is another area of the construction industry which is evolving and presenting new opportunities.

Currently, freight transport within the UAE is predominantly road-centric, but significant changes are on the horizon. The impending completion of the Etihad Railway project is poised to revolutionise the transportation landscape, reducing dependency on road freight and potentially lowering supply chain costs for end users.

However, challenges persist, including high costs associated with warehouse establishment and the impact of rising fuel prices on logistics expenses. Despite the competitive and fragmented nature of the UAE's logistics industry, there are avenues for growth and optimisation. The country’s expanding cargo handling capabilities, present opportunities for logistics players to enhance their fleets and improve overall efficiency.

On-demand logistics is another area of growth with great potential. Businesses that can strategically implement efficient, flexible delivery models that distinguish themselves from other companies already in this space stand to gain significantly.

Moreover, the Etihad Rail project, anticipated to handle 50 million tons of freight per year upon completion, holds the promise of further reducing supply chain costs for end users and fortifying the logistical backbone of businesses involved in supply chain management. Entrepreneurs in this arena, armed with a forward-thinking approach, can strategically position themselves to capitalise on these transformative developments.

Consulting and advisory services for construction

Consultancy is another area with massive importance in the construction industry in the UAE.

The demands of the country’s hot arid desert climate bring with it unique construction challenges. The intense heat, reaching over 40 degrees Celsius, poses risks to traditional construction methods, affecting the curing of materials, challenging energy consumption in cooling systems and placing increased demand on water resources. These unique challenges create demand. Businesses that can offer expertise to find creative solutions to these problems are highly sought.

The demand for insights into green building design is also soaring, driven by the industry's shift towards innovative materials and construction techniques and the current drive towards sustainability. Cost consultancy is another area of growth, particularly as construction projects increase in complexity and scale. Balancing budget constraints with project requirements becomes paramount, creating a substantial demand for consultancy services that offer precise estimation and effective management of project expenses.

Conclusion

The UAE’s construction industry is going through a period of extraordinary growth.

The country’s steadfast commitment to infrastructural development, cutting edge technologies and sustainability is ensuring it continues its upward economic trajectory and remains at the forefront of the building sector.

In doing so, it’s opening up a multitude of opportunities for entrepreneurs with the right experience and expertise to tap into this lucrative market.

Why choose RAKEZ to start your construction company?

Our simplified company registration processes, competitive cost structures, low tax benefits, and various incentives are tailored to reduce operational expenses and amplify profitability.

In addition, we provide modern, well-equipped facilities and infrastructure close to major logistics hubs, including purpose-built office spaces and customisable warehouses, designed to cater specifically to the needs of construction companies. We also offer comprehensive support services, encompassing bank account opening and legal and regulatory assistance to ensure seamless and compliant operations for your construction venture.

Connect with us at +971 7 204 1111 or visit our website to explore how RAKEZ can be your strategic partner. We're here to assist you every step of the way.