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Gulf Industry Magazine helps you catch up with the numbers behind economic and industrial developments in the region.

June 2013

UAE tops contract awards list

WITH 2013 forecasted to be a year of optimism and opportunity for construction in the Middle East, all eyes are back on governments in the region and how they propose to manage their spending, according to a report.

In a region where there is an acute deficit in terms of infrastructure, the ingredients for capital projects could not be better, says the newly released annual report on the sector: “GCC Powers of Construction: Meeting the challenges of delivering mega projects” by Deloitte Middle East, a leading professional services firm.

According to the report, the UAE replaced Saudi Arabia as the GCC’s largest construction market in 2012 with $16.2 billion, 4 per cent more than the $15.6 billion of contracts awarded in Saudi Arabia. This is the first time since 2008 that Saudi Arabia has not recorded the largest value of construction awards in the region. The largest construction deal awarded in Saudi Arabia in 2012 was the contract awarded to expand the Masjid Al Haram in Madinah.

Qatar was the third most active GCC construction market in 2012, with $10.4 billion worth of contracts awarded. Transport infrastructure dominated Qatar’s construction sector, with four of the five biggest contracts awarded for major transport projects.

Ahead of the 2022 FIFA World Cup, and in line with the country’s 2030 Vision, Qatar’s infrastructure spend is expected to reach $150 billion.

Kuwait was the fourth most active construction market in 2012, with $8 billion worth of deals awarded. The largest of these was the long-awaited $2.6 billion deal to build the Subiya Causeway, which had been in the pipeline for almost a decade. Transport construction accounts for 76 per cent of total construction spend in the country.

 

UAE economic growth hits 4.4pc in 2012
ECONOMIC growth in the UAE accelerated to 4.4 per cent in inflation-adjusted terms in 2012 from a downwardly revised 3.9 per cent the previous year as activity picked up across all sectors, its statistics office said.

“One of the most important factors is the role played by good and stable oil prices in general over the last year,” the National Bureau of Statistics said in a data commentary.

“All economic activities saw positive improvement in their growth rates in 2012, which has positively reflected on the value of the country’s GDP (gross domestic product),” it said.

Oil prices averaged $112 per barrel last year, up from $109 in 2011, the office said, adding that the non-oil sector share in the country’s real GDP was estimated at 67.3 per cent in 2012.

Analysts polled by Reuters in April forecast GDP growth in the UAE, the second largest Arab economy after Saudi Arabia, to slow to 3.3 per cent this year.

 

GCC exports 80pc of petchem production
THE Gulf countries export more than 80 per cent of their petrochemical production including ethylene glycol, styrene monomer and paraxylene to overseas markets, said a senior industry expert.

More than 30 million tonnes of petrochemicals was exported during 2012 against only 10 million tonnes in 1999, an increase of over 250 per cent in just 13 years with an average annual growth of 5 per cent, stated Mohammad Husain, the president and CEO of Kuwait-based Equate Petrochemical Company.

Husain pointed out that GCC exports faced a number of challenges including port congestions, inadequate infrastructure and instability of market conditions. “But despite all these, the Gulf’s international exports continue to rise,” he noted.

 

Bahrain real GDP grows 3.9pc in 2012
BAHRAIN’S real gross domestic product (GDP) is estimated to have expanded 3.9 per cent last year from the 1.9 per cent growth seen in 2011, according to a new report.

Even as the oil sector shrank by around 8.5 per cent in 2012 due to a temporary technical disruption at the country’s main Abu Sa’afa oilfield – expected to return to full capacity this year – strong growth in the non-oil sector drove economic momentum, said the research report by Global Investment House.

Bahrain’s economy is expected to grow by 4.2 per cent this year, the Gulf Daily News quoted the report as saying.

In the first three quarters of last year, Bahrain’s economy grew at an annual pace of 3.7 per cent, while headline growth rate slowed steadily from 4.8 per cent year-on-year in the first quarter to 2.9 per cent in the second, and 3.3 per cent in the third.

Moderate expansion in oil production and a recovery in the services sector will maintain economic growth at around 3.7 per cent during 2013-15, the report said.

 

Saudi surplus tops $164bn in 2012
SAUDI Arabia’s current account surplus rose to SR149.8 billion ($39.9 billion) in the fourth quarter of 2012 from SR140.7 billion in the previous three months, central bank estimates showed.

The figure puts the 2012 surplus at SR617.9 billion, or 22.7 per cent of the Opec member’s gross domestic product, according to a Reuters calculation based on the official data, down from the SR669.2 billion previously announced.

Analysts polled by Reuters in April forecast that the world’s top crude exporter will see a current account surplus of 16.5 per cent of GDP in 2013.

 

Kuwait trade surplus a record $75bn
KUWAIT’S trade surplus reached an all-time high of KD25.9 billion ($74.5 billion) in 2012, surpassing the previously set record level of KD21.2 billion in 2011, a report said.

The surplus, estimated at around 53 per cent of annual 2012 GDP, was boosted by a combination of strong exports and comparatively soft imports, added the latest Economic Update on foreign trade issued by the National Bank of Kuwait (NBK).

This year, the trade surplus is expected to be limited by lower oil prices and a faster pick-up in imports – the latter driven by an improvement in non-oil sector growth, said the update.

Oil exports also climbed to a record high of KD31.6 billion in 2012 – up 18 per cent on the previous year. This was driven by a 12 per cent year-on-year increase in oil production, as well as a 3 per cent year-on-year rise in Kuwait Export Crude (KEC) prices to $109 per barrel.

Non-oil exports edged up to KD1.6 billion in 2012 (+ 5 per cent year-on-year) on the back of higher ‘re-exports’ and ‘other’ goods.

Imports grew by a sluggish 3 per cent year-on-year in 2012 to KD7.2 billion, compared to an average growth rate of 12 per cent over the past decade.

Meanwhile, the pace of growth in imports could accelerate this year, as government development projects – coupled with a strong consumer sector – spur growth in non-oil GDP, according to the update.




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