The UAE’s construction sector is projected to reach USD 167.27 billion by 2031, up from USD 120.82 billion in 2025, according to a market forecast by Mordor Intelligence. The firm puts the compound annual growth rate at 5.64 per cent over the 2026–2031 period.
The expansion is broad-based. Residential construction held the largest share at 43.8 per cent of market value in 2025, but infrastructure is forecast to grow fastest at a 5.23 per cent CAGR through 2031, the report found.
That shift reflects accelerating public spending on transport, energy, and water – Abu Dhabi’s infrastructure envelope alone is valued at USD 65.3 billion, spanning roads, solar farms, hydrogen facilities, and desalination plants.
Dubai remains the market’s centre of gravity, accounting for 47.2 per cent of total activity in 2025. However, the smaller emirates – Ajman, Ras Al Khaimah, Fujairah, and Umm Al Quwain – are collectively expanding at a 6.71 per cent CAGR, the fastest rate of any geographic segment, backed by housing grants, industrial free zones, and tourism investment.
Private developers supplied 65.1 per cent of construction finance in 2025, but public budgets are rising faster, at a projected 5.90 per cent CAGR, as federal and emirate governments front-load enabling infrastructure to attract private co-investment.
The distinction matters for contractors: sovereign tender rules, payment cycles, and arbitration frameworks differ materially from private developer contracts, and firms that can navigate both are winning the widest range of work.
On construction method, conventional on-site techniques still accounted for 74.3 per cent of 2025 activity, but modular and prefabricated approaches are expanding at a 6.54 per cent CAGR – the highest rate among all method segments.
Labour scarcity and compressed delivery schedules are the main catalysts. Mordor Intelligence estimates roughly 3.1 million construction workers were active on UAE sites in 2024, yet concurrent mega-projects are competing for the same specialised skills. Steel rebar prices rose 15–20 per cent and cement 10–12 per cent during 2024–2025, the report notes, tightening margins on fixed-price contracts.
Competition among contractors is moderate. The top 10 firms hold an estimated 35–40% of market spend, leaving substantial room for mid-tier and specialist players. Digital credentials – BIM capability, drone-based progress tracking, Estidama or LEED compliance – are increasingly conditions of entry on top-tier tenders, Mordor Intelligence says, rather than differentiators.
Recent project milestones include Emaar’s USD 21.8 billion Oasis scheme in Dubai, the 2-gigawatt Al Dhafra Solar PV plant entering commercial operation in June 2024, and a USD 545 million commitment by du and Microsoft to UAE AI infrastructure, including hyperscale data centres.
The data centre segment is drawing specialist contractors versed in Tier III/IV specifications, with a separate USD 25 billion pledge from ADQ and ECP adding to the pipeline.
All market size figures are from Mordor Intelligence’s proprietary estimation framework, updated as of January 2026.
