The Construction Industry during Ramadan

The holy month of Ramadan is just a few days away and this year, fasting may exceed thirteen hours a day in the UAE.

In the GCC, during the holy month, many consumer brands offer significant promotions and discounts; this is not merely due to creating an incentive for consumers, but rather it stems from acts of good will. This year the month of Ramadan coincides with the beginning of summer and the start of the summer vacations for many of the schools. The question is how does that affect the construction industry and what to expect in Ramadan this year?

What the Rules say

The number of working hours are reduced during Ramadan and there is a mid-day break rule in the UAE as well that makes sure construction firms offer more off-hours for the on-site workers. Indeed, during the three months of summer (June to September), workers have a three hour break typically from 12:30PM to 3PM. Companies must post clear information about work hours for staff while shelters must be provided out of the sun. Any firms found to have staff working during the designated break time would be fined Dh5,000 per worker up to a maximum of Dh50,000. During Ramadan, Muslim workers who are fasting finish their working day by 1pm and return to their accommodation.

As for evening works and according to Abu Dhabi City Municipality, heavy work is not allowed after 7pm but light work could be carried out anytime. According to Abu Dhabi’s Environment Health and Safety Management System, any activity resulting in excess noise that can have an adverse impact on the peace of a neighborhood should be undertaken only between 7am and 8pm on working days, and between 9am and 7pm on weekends and public holidays.

In this report, we are looking into the impact of Ramadan on the construction sector and explore ways on how to capitalize on the firms’ resources during the holy month.

Traveling during Ramadan and its impact on the construction sector

 In the UAE, there are over 200 nationalities currently living in the country and according to a report by AMEinfo “People tend to spend more money on travelling during Ramadan, especially during the last week of fasting where they dramatically spike. The report mentions that nearly 85% purchase their travel tickets online, travel agent or comparison site, and also via the airline app. This factor, even though it may seem to be irrelevant to the construction sector, has a direct impact on the market. Many of the senior management and decision makers in the construction industry travel and it this means lots of new contracts are going to be pushed back.

Productivity in the construction sector during Ramadan

According to a report by Construction Week, “it has become apparent that the level of productivity during the summer and Ramadan periods has been on a steady decline, year after year. So far, I have had only one client who suggested that they would pick up an assignment after Ramadan.This year has witnessed a larger number of companies implementing strategic measures to ensure they are both stronger and leaner to avoid the slowing down of their business”

Therefore, many firms in the construction sector can take advantage of the slowdown in Ramadan to restructure their workforce to maximize efficiency in their current and upcoming projects and further analyze the cost structure of the projects.

Tips for maximizing productivity during Ramadan for construction firms

There are various ways firms can look into making the most from the reduced working hours and the slowdown in the holy month of Ramadan. According to a report by Arabian Business, here are some of the best ways:

  • Prioritize your activities and focus on key points of strength

As mentioned earlier, the working hours are reduced across all industries. “Most construction companies in the Middle East see a drop in field hours, owing to labor policies that prohibit shifts of more than eight hours, both during the day and at night. Then there’s the midday break rule to consider. In the UAE, for example, laborers are not permitted to work in direct sunlight during the hours of 12:30 and 15:00, from mid-June until mid-September.” Effective planning to make sure that contractors can make the most of it this reduced timing is an important factor to ensure to get the most out of the reduced timing; therefore, construction companies need to create a new workflow for maximum outcome.

  • Workforce development

Educating and training of the workforce for any industry is an ongoing process, the challenge that many firms face is the allocation of the right time for these types of activities. Since Ramadan is falling during a very hot time of the year, construction companies can hold courses in shaded and air-conditioned areas for their staff. In addition, and as explained during NFT and Potain’s Safety First Campaign, there are many ways to stay protected from the heat. Laborers should work in the shade as much as possible or at night, drink plenty of water after Iftar, wear lightweight, light colored and loose-fitting clothes and use fans to improve air flow.

  • Focus on corporate social responsibility (CSR programs)

“Productivity is not just about how much progress is achieved on site. Effective corporate social responsibility (CSR) initiatives have far-reaching ramifications for the community at large, your workforce, and ultimately, your company’s bottom line.” The holy month of Ramadan is a month of giving and during this spiritual month, therefore, there is more incentive for CSR initiatives. The question is how would affect the productivity? CSR initiates are directly correlated to staff morale and happiness at work which in return will have a very positive impact on productivity of a construction firm. Many firms in the UAE host Iftars for their staff and their families which also create a family culture in a firm.

  • Strategy and experimenting

Ramadan and summer months in the GCC are a perfect time to re-evaluate and analyze the current annual strategies and action plans. “Are there any onsite processes that could be tweaked? Are there any technologies that you’ve been meaning to trial? Are there any issues or disputes that you’ve been intending to resolve?” or  How will we move forward towards Q4? These are just some of the experimentation that can be explored during this month. “This period of the year is also ideal for ‘big picture’ thinking. Reflect on how you and your colleagues collaborate, not just within your company but also with other stakeholders. Could lines of communication be strengthened? Is there room for improvement within your procurement process?”

Other business strategies can be revisited such as corporate communications plans, workflow plans after the month of Ramadan, all of which could have a direct impact on the productivity of a construction firm.

The Verdict

During the holy month of Ramadan many industries in the B2B sector slowdown and the construction industry is not immune to this factor; however, it does not mean that firms can’t benefit from this slowdown. Firms can look into re-strategizing and re-planning for the year as the market is expected to significantly pick up in Q4 of this year and as we approach EXPO 2020.

According to a report published on Dubai Public Policy Research Center, “However, studies show that the economies of Muslim-majority countries do not simply slow down during Ramadan; rather, their economies change. As these countries grow their role in the global economy, they are more likely to find ways to mitigate the domestic economic effects of Ramadan to ensure competitiveness in the global marketplace. For example, instead of reducing working hours during Ramadan in Malaysia and Indonesia, some companies employ policies which adjust working hours so that all employees start and end their workdays earlier. In Saudi Arabia, where many staff in the financial services sector are non-Muslims, the government allows only Muslims to limit their working hours during Ramadan. Although in perhaps a more inclusive manner, this motif is similarly seen in the UAE, where global companies such as Emirates Airlines effect a popular ‘culture swap’.

Abu Dhabi: Aldar acquires AED3.7bn worth assets from TDIC

Abu Dhabi-based developer, Aldar Properties, reached an agreement with Tourism Development & Investment Company (TDIC) to acquire a portfolio of prime real estate assets worth AED3.7bn,in one of the largest real estate acquisitions in the country’s history.

Aldar has acquired assets located in key destinations, with a focus on Saadiyat Island. This comprises of 14 operating assets within various sectors ranging from hospitality, retail, residential, education, and infrastructure, in addition to a selection of prime strategic land plots and projects under development on Saadiyat Island.

Talal Al Dhiyebi, CEO of Aldar Properties, commented: “Acquiring assets on Saadiyat Island presents Aldar with an unprecedented opportunity to add significant value to its portfolio. The opening of the Louvre Abu Dhabi has demonstrated the government’s commitment to make Saadiyat Island one of the most sought-after destinations in the world. We believe this landmark acquisition will further advance Abu Dhabi’s real estate sector and accelerate the development of Saadiyat Island, taking it to the next level. This is a very exciting time for the market, and as its leading player, we’re well placed to take advantage, with the injection of these new assets representing a strong addition to our impressive portfolio.”

With long stretches of prime beach, and with beachfront hotels, as well as high-quality beach villas and apartments, Saadiyat Island has for some time been the destination of choice for many discerning residents and visitors.

The value of Saadiyat Island was more recently reinforced by the opening last year of the Louvre Abu Dhabi, to much international acclaim; and with Saadiyat Island’s cultural district to be extended further through the development in the coming years of the Zayed National Museum and Guggenheim Abu Dhabi, the growth opportunities on offer are very clear.

The acquisition of TDIC’s operating assets will thus enhance Aldar’s high-quality asset management business with an additional stream of recurring revenue in line with its growth investment plan.  The acquisition of the land and projects under development will form part of Aldar’s development destination strategy. The acquisition will immediately positively contribute to the performance of both the development and asset management business in 2018 and beyond.

The operating assets being acquired include Eastern Mangroves complex, Saadiyat Island district cooling assets, Cranleigh School Abu Dhabi, Westin Golf & Spa and other community retail and leisure assets, and will deliver an incremental net operating income of approximately AED120mn to Aldar’s Asset Management portfolio on an annualized basis.

The gross development value of the projects under development on Saadiyat Island is AED2.5bn. The land being acquired is located on Saadiyat Island, is infrastructure enabled and includes approximately 1.1 million sqm gross floor area.

The acquisition is expected to fully complete by end of June 2018 and it is subject to fulfillment of certain conditions.