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Margins up for UAE work

Contractors working in the United Arab Emirates have seen margins increase to 15 per cent.

This is despite materials costs rising nearly one-fifth year-on-year.

The building boom in the fast-growing resorts of Abu Dhabi and Dubai has meant contractors remain in demand, leading to a 15.5 per cent rise in tender prices over the past 12 months. But labour costs have remained flat.

Materials prices have increased by 19 per cent overall, with key products such as steel rising 45 per cent and cement rising 33 per cent. Cement prices in Dubai were capped in July, following Saudi Arabia’s lead last year.

Consultant EC Harris, which compiled the figures, said the Emirates has also been hit by spiralling land costs, rising costs of living and the weakness of the dollar, which has made relocating to the Middle East less attractive.

The pace of development is leading to problems with infrastructure and utilities, which have been unable to keep pace. The price of a major substation has risen by 25 per cent over the past year.