September 2017

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

UAE, Saudi non-oil sectors see output boost

THE non-oil private sectors of both the UAE and Saudi Arabia gained steam in July, supported by sharp expansions in output and new work, according to the latest Emirates NBD PMI surveys.

UAE: In response to greater output requirements, firms scaled up inventories and employment. On the downside, new export orders fell at the quickest pace in the history of the survey. On the price front, firms faced stronger input cost inflation, but were unable to pass these on to consumers amid intense competitive conditions.

The survey, sponsored by Emirates NBD and produced by IHS Markit, contains original data collected from a monthly survey of business conditions in the UAE non-oil private sector.

Commenting on the UAE PMI survey, Khatija Haque, head of Mena Research at Emirates NBD, said: “The PMI survey in July showed that domestic demand remained robust, offsetting weakness in external demand last month.  Firms were more optimistic about the coming year, and increased inventories at a record rate, partly in anticipation of further order growth.”

Saudi Arabia: Greater output requirements encouraged companies to purchase more inputs and stimulated job creation in the sector. Weakness was seen regarding trade, however, as new export orders fell. On the price front, input costs rose at a solid and accelerated pace. However, firms’ ability to fully pass on higher cost burdens to customers was restricted by intense market competition and charges increased only marginally.

Commenting on the Saudi Arabia PMI survey, Haque said: “Faster growth in output and new orders helped the headline PMI in Saudi Arabia rise in July, signalling the fastest rate of non-oil sector expansion in three months. Firms were more optimistic last month, and this likely contributed to increased buying activity and inventory accumulation.”

Dubai non-oil sector continues robust growth

DUBAI’S non-oil private sector maintained robust growth momentum in July, registering gains in overall business conditions with wholesale and retail as the best performing category, according to the latest Emirates NBD Dubai Economy Tracker Index.

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 – registered at 56.3 in July, broadly similar to 56.5 in June. The latest index reading was one that was above the long-run trend (55.2). The survey covers the Dubai non-oil private sector economy, with additional sector data published for travel & tourism, wholesale & retail and construction.

Khatija Haque, head of Mena Research at Emirates NBD, said: “While the headline index continues to reflect strong growth in the non-oil economy in July, firms’ margins continue to be squeezed as they lower selling prices, particularly in the trade and hospitality sectors.  Employment growth remains soft overall.”

Abu Dhabi metals trade hits $1.85bn

ABU DHABI’S trade in iron and steel, aluminium, and copper hit Dh6.8 billion ($1.85 billion) during the first third of 2017, a growth of 15.6 per cent over the corresponding period last year, according to the Statistics Centre- Abu Dhabi.

The three minerals account for 11.6 per cent of the total non-oil trade across the emirate’s points of entries over the first four months of the year, which is valued at Dh58.2 billion, reported Wam, the Emirates official news agency.

In more detail, the iron and steel trade amounted to Dh1.4 billion during the first three months, a growth of 16.6 per cent from Dh1.2 billion in the corresponding period 2016. The copper trade amounted to Dh3.1 billion, a growth of 4 per cent from Dh2.98 billion in the corresponding period last year. The aluminium trade hit Dh1.3 billion during the first third of the year, against Dh1.7 billion during the same period last year.

Jafza non-oil foreign trade hits $80bn

DUBAI-based Jebel Ali Free Zone (Jafza), a subsidiary of DP World, has consolidated its position as a major trading and logistics hub by growing its non-oil foreign trade by 17 per cent to 27.9 million tonnes in 2016, worth $80.2 billion, from 23.9 million in 2015.

Sultan Ahmed Bin Sulayem, group chairman and CEO of DP World, said: “The value and volume of trade through Jafza underlines the strength of the national economy and its ability to adapt to global trading conditions, create investment opportunities and open up new markets to exports from the UAE.”

Bin Sulayem added that Jafza supports economic diversification in line with the directives of HH Sheikh Mohammed bin Rashid Al Maktoum, Vice President and Prime Minister of the UAE and Ruler of Dubai, to provide services and incentives to investors that meet their aspirations and provide additional benefits to compete in local, regional and global markets.

UAE-China trade surges to top $141bn

CHINA continues to top the list of UAE’s major trade partners for the third straight year, with total bilateral trade exchange amounting to Dh520.6 billion ($141.7 billion) from 2014 through 2016, according to Ministry of Economy statistics. India came second followed by the US, while Saudi Arabia came fourth and then Germany fifth, reported Wam, the official Emirates news agency. Despite the state of deceleration the world economy is going through, the UAE foreign trade continued to post fair growth, with trade exchange between UAE and China, for example, keeping proportional values over three years, edging down to Dh170.2 billion by end of 2016 from Dh174.6 in 2015 and Dh175.8 billion in 2014. Bilateral trade exchange with Saudi Arabia, which came fourth on the list of the country›s top trade partners, amounted to Dh231 billion over three years.

Active insulation market set to top $357m

THE global active insulation market is expected to reach $357.8 million by 2025, according to a new report by Grand View Research. Globally, increasing demand for insulation in building and construction has been a major factor driving growth. In addition, rising demand for activewear and sportswear for activities such as cycling, yoga, workouts and sports is also expected to enhance the industry growth.

Europe emerged as the largest regional segment accounting for 34.1 per cent of total market volume share in 2016. This can be attributed to the favourable government regulations regarding use of active insulation in building applications in the region. Asia Pacific is anticipated to emerge as the fastest growing regional segment with a CAGR (compound annual growth rate) of 6.3 per cent over the forecast period. Product demand in the region is majorly attributed to the increasing utilisation of active insulation technology in the production of active wear and sportswear in countries like China and India.

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