The Middle East construction market could stage a recovery in 2010, but the industry focus has shifted away from Dubai, according to a new survey published last week.
Boom and Recover - Understanding the Middle East Construction Market, published by legal expert Norton Rose, found that 55% of respondents with interests in the region’s construction industry expected the effects of the economic slump to fade within a year and for the sector to stage a recovery next year.
However, 71% now said their primary markets were based in Saudi Arabia, Abu Dhabi and Qatar with only 5% choosing Dubai.
Meanwhile, even though many construction contracts provide for arbitration in the region, not one respondent said they were involved with such a formal procedure, instead the 38% who said they were experiencing contractual disputes as a result of the financial crisis preferred to settle through informal negotiation.
The study said few contractors are willing to risk damage to their reputation by taking on an influential developer or employer in arbitration or court proceedings.
It quoted one director at a major consultant as saying: “People take it [arbitration] more personally here than in the western world. It is taken as a personal slight rather than a dispute between two companies.”