Key Changes in Construction Sector

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It has historically been the biggest or one of the biggest employment sectors in the Arab region, and has understandably attracted some of the most accomplished graduates. The Arab region had a construction boom in the 1970s, 1980s, and 1990s, with millions of Dollars’ worth of civil, industrial, and residential construction projects. Indeed, Saudi Arabia and the United Arab Emirates led this construction boom, they being the biggest two markets in the region with many economic and logistical incentives. When the Saudi government discovered oil, it used the revenues for developing the country through construction projects. This resulted in countless, high-profile infrastructural projects.

As of 2018, a lot of changes have taken place, in the intensity of the competition, the number of graduates entering the job market, and the supply of and demand for engineers. The field is now undergoing a downturn because of the economic recession that started in Saudi Arabia in 2015. This downturn has had several consequences, as many experts have opined.

  • The Supply of Engineers Has Exceeded Demand

Under-girding the now precarious supply and demand forces in one country at least, Jordan, the number of engineers has greatly exceeded demand. Whether it is civil engineering, industrial, electrical, mechanical, or others, the engineering-construction sector is barely growing as of 2018 and early 2019 in Jordan.

engineers in Jordan

  • Approximately 10, 000 engineers joined the guild in 2018 and 9500 in 2017.
  • 1 of out 50 citizens in Jordan is an engineer.

Consequently, many engineers also can spend over a year seeking employment (a conservative estimate), even entry-level employment, and not find any. This reflects an occupational and educational imbalance in the number of engineers. Universities in the Arab countries also focus on and promote engineering as a “default” occupation for many in the scientific track, encouraging students to become engineers. The UAE is an exception since most of its engineers are Indian and civil engineering is the most common specialty, as the UAE Association  of Engineers confirms.

Another factor behind the now-excessive supply of engineers is that the competition has intensified in the field, unlike the market in the early phase of the development boom in the region. Saudi Arabia attracted 100, 000s of engineers from Jordan, Palestine, Lebanon, and other countries. It was easy to find employment and get sponsorship. Now, this is changing and rapidly.

The market, however, is still healthy in Saudi Arabia, UAE, Bahrain, and Egypt. Saudi Arabia’s Vision2030 seeks to expand the social, occupational, cultural, and economic landscape in the kingdom by, among other steps, diversifying the economic base. It promises to provide billions worth of projects to respond to the demographic and infrastructural expansion needs of the country.

  • Expatriate Visa Restrictions

Saudi Arabia has led the way in limiting expatriate employment with its nationalization program. That is understandable for a country that has relied almost entirely on its expatriate labor force for its economic and infrastructural growth. Now, many engineers, especially entry-level and even moderately experienced ones, are not finding employment in engineering firms and / or the fees for retaining them are becoming prohibitively expensive for the firms employing them. Many expatriate engineers have, thus, been returning to their home countries. Only engineers with, say, >10 years of experience can keep their jobs.

  • Labels and Professional Licensing

Some experts in the field have realized that extra certifications, such as the famous Professional Engineer (PE) and the Project Management Professional (PMP), do not always provide Added Value to engineer’s productivity. This can be because many engineers over-estimate the importance of labels, degrees, and licenses, and downplay the importance of work experience. This has led to an overall delay or gap in engineers’ expertise or how updated they are. Another factor in the skills gap is that no Arab government or engineers’ guild requires the PE, leading to a delay in engineers monitoring their progress and their experience curve.

  • Professional and Experience Gap

As the manager of a construction and engineering firm said, American or international companies can easily win bids for projects in the Arab region. Arab companies need to compete aggressively, attesting to an experience gap. The UAE is a remote exception in that it does appreciate local companies and experience. This same expert said many Arab companies are not up-to-date and that many engineers now need to study new specialties within engineering—such as solar engineering and renewable energy engineering. There is an overall absence of strategic planning, let alone executing any planning.

  • The Changing Economic and Labor Market

Saudi Arabia and the UAE are heavily dependent on oil revenues, where Jordan and Egypt, as two examples, are not. This has resulted in an uneven distribution of engineers in the key markets. Digital media and marketing are very slowly maturing in the region, in that companies are gradually recognizing their importance to their profitability. The construction sector contributes 5% to the Jordan economy, although the number of engineers in Jordan has exceeded demand and merely 6% of the Jordan labor market is in construction.

Sectoral Contributions to Jordan Economy

Source: Department of Statistics in Jordan, 2016

 

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