News Column

Saudi Arabia,United Arab Emirates : ABU DHABI's drive in its economic growth

June 6, 2014

Property, finance and manufacturing emerged as the biggest drivers of Abu Dhabi s economic growth, taking up the slack from slowing expansion in the oil and gas sector.

The trio accounted for about a third of the emirate s overall GDP growth of 5.18%, slightly more than the oil and gas sector.

Non-oil growth is driven by manufacturing and then financial and real estate sectors. The Kizad Khalifa Industrial Zone Abu Dhabi , even though it is not fully operational, is having an impact.

Activity in Abu Dhabi s property market has picked up since a glut of supply prompted a downturn during the 2009 global financial crisis. Property prices leapt by about a third, while Aldar Properties has announced a flurry of projects after merging with Sorouh.

The performance of financial services has recovered after a tide of bad loans receded in the banking system and asset valuations recovered. Manufacturing is expanding, led by Emirates Global Aluminium, Emirates Steel and Borouge, the emirate s industrial heavyweights.

Real non-oil GDP grew by 7.4%, up from 5.9% the previous year. The growth figure falls in line with Abu Dhabi s 2030 vision, which aims to reduce reliance on hydrocarbons.

The oil sector grew by 3.2%, down from 3.8% the year before.

The data showed the contribution of the non-oil sector to the economy rose to 48.6% last year, up from 47.6% the year before.

Other data released yesterday also showed the buoyancy of the non-oil economy.

The headline reading of HSBC s UAE purchasing managers index, which tracks performance in the non-oil private sector, showed activity reached 57.3 points, down slightly from April s record high of 58.3.

Output and new orders continued to grow well and the labour market is in rude health. These would be good numbers at the best of times given the weakness affecting so many other emerging markets, the data is better still.

The UAE s headline score was higher than in neighbouring Saudi Arabia.

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Source: TendersInfo (India)

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