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UAE tender prices fell in 2011

According to a new report, tender inflation in the UAE has decreased by 1.5 per cent during the first nine months of 2011 and is expected to remain at the same level for the rest of the year.

In the quarterly Market View Report from EC Harris, which tracks tender prices in the UAE property and infrastructure sectors, has revealed that the falling costs of commodities across the globe is taking the pressure off tender prices across the UAE.

Nick Smith, Head of Cost & Commercial Management for EC Harris in the Middle East comments, "In the final months of the year contractors across the UAE will be under less pressure from rising commodity prices. However, there will still be a focus on cutting costs to provide the extremely competitive rates that have been prevalent in the market in recent time and which have suppressed the whole effect of material price increases."

With the market expected to show little improvement during the fourth quarter of 2011, material prices and construction labour rates are likely to remain flat. However, the EC Harris report predicts the market will pick-up over the next couple of years with tender prices forecasted to increase by up to 4.3 per cent in 2012 and then exhibit a steady 5 per cent growth throughout 2013 and 2014.

"With material prices expected to rise once more next year, clients and contractors alike should begin to plan ahead and consider a purchasing strategy that will enable them to enter 2012 in as strong a position as possible. Whilst the price of commodities including rubber, aluminium and tin remain comparatively low, there is a real window to effectively spend to save," added Smith.