It has been widely debated the extent the uncertainty in oil prices have had on the Gulf market and that it, in fact, does have a significant and direct impact towards the UAE construction market. This has been reflected from time to time during the course of the year as contracting and interior fit-out companies have been forced to tighten their budgets and let go a significant size of their manpower. Nonetheless, we still encounter new projects for construction as we approach Dubai Expo 2020 and the 2022 Qatar World Cup.
The GCC market for interior contracting and fit-outs, was estimated at US$7.06 billion in 2015, is set to climb by 25.62 percent to US$8.87 billion by the end of 2016.
The main struggle lies in balancing whether to retain current manpower or releasing employees, as qualifying for projects means going through 4 to 5 stages before the project is awarded. This runs the risk of losing good employees if projects are lost or vice versa. Despite developers and contractors restricting their budgets, tenders are still being awarded in the market and as a result of this fit-out firms are investing heavily into strengthening their business development and commercial teams initially with the key objective is to establish and maintain relationships with key clientele.
Tendering for the right project within the market’s current climate is a crucial element for a company’s long-term sustainability for projects. This is more imminent in the interior fit-out market as it is the last stage in the construction cycle, companies may have to wait for 6 to 12 months or more before receiving complete payments from clients and payment delay can make the difference in contributing towards a company’s long-term sustainability.
There is a cyclical occurrence of the same batch of companies being awarded project tenders while others are still playing catch up. In recent events, we have acknowledged that the company’s success is driven through identifying their specific market segmentation to achieve their long-term sustainability goals in order to plan realistic budgets, retain and attract the best talent.
The question remains, how would companies gain their competitive advantage in line with the boom that is expected to lead into 2020?
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