01 June 2019

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

Dubai’s non-oil sector sees fastest growth

DUBAI’S non-oil private sector witnessed improvement in overall business conditions at the fastest rate in over four years in April, reflecting the trend in new business, as employment was broadly unchanged during the month.

Notably, business conditions in the wholesale & retail sector improved at a series record pace, partly influenced by sharp price discounting and promotional activity. Across the non-oil private sector as a whole, prices charged fell for the twelfth month running.

The seasonally adjusted Emirates NBD Dubai Economy Tracker Index – a composite indicator designed to give an accurate overview of operating conditions in the non-oil private sector economy – edged up from March’s 57.6 to 57.9 in April, the highest since February 2015. The Index has registered above its long-run trend level of 55.2 throughout the first four months of 2019. April data for three key sectors revealed a record improvement in business conditions at wholesalers and retailers. The headline index for the sector rose to 60.1, the highest since it was first compiled in March 2015. The figure for travel & tourism was the second-highest on record (58.8, below March’s peak of 59.8) while the construction figure improved to 53.4.

A reading of below 50.0 indicates that the non-oil private sector economy is generally declining; above 50.0, that it is generally expanding. A reading of 50.0 signals no change. The survey covers the Dubai non-oil private sector economy, with additional sector data published for travel & tourism, wholesale & retail and construction.

The rate of growth in total business activity eased from March’s four-year high in April, but was nonetheless among the sharpest registered since the series began in 2010. Growth rates were elevated in all three of the key monitored sectors, led by travel & tourism.

In contrast, employment in the non-oil private sector was broadly unchanged in April compared with March. This continued the trend shown over the past 12 months, in which the Employment Index has averaged exactly 50.0. Jobs declined in both the travel & tourism and construction sectors, and rose only slightly in wholesale & retail.


Middle East air freight volumes down 6.2pc

MIDDLE Eastern airlines’ freight volumes decreased 6.2 per cent in April 2019 compared to the year-ago period, and capacity increased by 0.7 per cent, according to figures released by the International Air Transport Association (Iata).

The Middle East’s air freight volumes have been declining since the fourth quarter of 2018. Freight volumes to and from Europe and Asia Pacific are growing, but a double-digit decline for the key North America market highlights some of the issues facing the region’s carriers, added the report.

The global air freight markets showed that demand, measured in freight tonne kilometers (FTKs), fell 4.7 per cent in April 2019, compared to the same period the year before. This continued the negative trend in year-on-year demand that began in January. Freight capacity, measured in available freight tonne kilometers (AFTKs), grew by 2.6 per cent year-on-year in April 2019. Capacity growth has now outpaced that of demand for the last 12 months.

Air cargo volumes have been volatile in 2019, due to the timing of Chinese New Year and Easter, but the trend is clearly downwards, with volumes around 3 per cent below the August 2018 peak.

Brexit-related trade uncertainty in Europe and trade tensions between the US and China, have contributed to declining new export orders. In month-on-month terms, export orders have increased only three times in the past 15 months and the global measure has been indicating negative export demand since September. The continued weakness is likely to lead to further subdued annual FTK growth in coming months. 


UAE provided $5bn in grants during 2018

THE grants provided by the UAE locally and overseas stood at Dh19.8 billion ($5.390 billion) in 2018, a growth 14.7 per cent on year, according to statistics by the Central Bank of United Arab Emirates.

Grants provided by the UAE in in H1-2018 hit Dh6.8 billion ($1.85 billion), before amounting to Dh13 billion ($5.39 billion) in the latter half, according to the statistics which are based on the Ministry of Finance’s figures, added the Wam report.

Also, Q3-2018 saw Dh7 billion ($1.91 billion) in grants and Dh6.133 billion ($1.67 billion) in Q4, it said.

2018’s grants account for 5 per cent of total government expenditure, including federal and local spending of every emirate, which surged to circa Dh398.3 billion ($108.43 billion).

The grants include current or capital transfers from the government to other government units, international organisations or foreign governments, excluding transfers between Federal and Local governments, added the report.


US drops import tariff on Turkish steel

THE US has reduced the Section 232 tariff on Turkish steel back to 25 per cent from 50 per cent, while terminating Turkey’s preferential trade treatment that allowed some exports to enter the country duty-free, said a report.

The White House last week issued a statement revealing that the US has reduced the tariff on Turkish steel, which was doubled last August, to 25 per cent again, according to report by S&P Global Platts from informed Turkish industry sources.

It has also terminated Turkey’s eligibility to participate in the General System of Preferences (GSP) programme based on its level of economic development, it said. The decisions were effective from May 17. Turkish industry sources have generally welcomed the US decision, saying it will have positive effects on Turkish mills’ export volumes and prices, added the report.


Abu Dhabi non-oil foreign trade tops $9.7bn

THE value of non-oil foreign merchandise trade through Abu Dhabi ports increased 11.5 per cent from Dh32.1 billion ($8.73 billion) in Jan-Feb. 2018 to Dh35.8 billion ($9.74 billion) in the same period of 2019.

This was the result of a 47.0 per cent increase in re-exports from Dh 6.0 billion to Dh 8.8 billion and 5.6 per cent increase in imports, while the value of non-oil exports decreased by 0.3 per cent in the same period, reported Emirates news agency Wam.

Total trade increased by 7.3 per cent in February 2019 compared with February 2018 due to an increase in re-exports by 54.7 per cent, while the value of exports and imports decreased by 9.4 per cent and 0.2 per cent respectively in the same period.

The growth in re-exports reflects the prestigious position now boasted by the emirate, in particular and the UAE in general as a regional hub for non-oil trade thanks to the country’s modern infrastructure, including strategic ports and state-of-the-art facilities.

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