A report on the manufacturing sector in the United Arab Emirates published by Truth Economic Consultancy, a leading research and consultancy firm, pointed out to the growth of the industrial sector in the country, where the total number of industrial units reached 4,960 units at the end of 2010 compared to 3,036 factories in 2004.
The increase in factories by 1,924 units marks a total increase of 63% and an average annual increase of approximately 8.53%.
The report, which is supported by Dubai Industrial City, a member of Tecom Investments, highlights the various details of the industrial sector in the UAE, its developments between 2004 and 2010. It also casts future expectations for this sector in the period from 2011-2017.
It features key points that reflect the state of this sector, such as the change in the number of industrial units between 2004 and 2010, the change in the gross capital invested in this sector across the UAE distributed across the same period, as well as the change in the size of the industrial labour force, along with the future forecasts for the growth and development in the manufacturing sector during the period 2011-2017. This includes predictions for the number of manufacturing units across the various industrial activities in the same period, and the gross capital invested in the manufacturing sector, along with the predicted size of the labour force in this sector.
The report revealed many important outcomes. It stressed that the industrial sector still retains its contribution rate of around 10% in the national GDP, and predicted an increase in this rate in the coming few years due to the maturity of other economic sectors, such as the construction sector. The report further expects the movement of additional investment capital in the industrial sector, highlighting the fact that the industrial sector has witnessed some significant and stable developments recently.
Abdulla Belhoul, Managing Director of Dubai Industrial City, said, "We, at Dubai Industrial City, believe in the comprehensive nature of the industrial sector, which cannot be developed effectively and efficiently without providing all the necessary industrial requirements for the success and growth of the sector such as infrastructure, roads, labour villages, modern offices, and energy, amongst many other industrial requirements." He said, "Dubai Industrial City has been designed as the ideal destination for serving investors in the industrial sector, as it provides and combines many services to meet their industrial requirements. Moreover, the industrial sector has a significant contribution in the growth of the national GDP, as it is the second largest, coming after the oil and gas sector. The UAE has many advantages and potentials that can boost the industrial sector to competitive levels at the regional and international levels. This report shed the lights on one of the most vital economic activities in the country and provides us with important future readings on the sector's development in the near future." Belhoul added, "Dubai Industrial City is a clear example of the developments the industrial sector is witnessing in the UAE. Our food and beverage, chemicals and base metal zones in the city, grew by an average rate of 10% in 2011. The City also witnessed an increase in demand of industrial lands, whereby investors' demand for constructing factories has increased. To date, 20 factories are operational in the City, while another 20 factories are currently under construction. The number of registered investors in Dubai Industrial City is now over 450 investors." Dubai Industrial City investors invested over Dhs2bn in the city to build their factories and their Industrial units. Dubai Industrial City has also invested Dhs4bn so far in infrastructure development including energy, water, roads, drainage and irrigation systems, and telecommunication services. These services currently cover 30% of the total a
ea of the city that is built on 55 square kilometers.
The Truth report also pointed to the increase in the total capital invested in industrial units in the country between 2004 and 2010, from Dhs63bn in 2004 to about Dhs110.2bn in 2010, marking an increase of about Dhs47.2bn, with an average annual growth rate estimated at 9.77%.
This increase was also accompanied by a rise in manpower in industrial enterprises during the same period, where the number of workers increased by 175.300 workers, from 206.700 workers in 2004, to reach about 382,000 in 2010, marking an increase of 85% and an average annual growth rate estimated at 10.78%.
As for future forecasts, the report expected the total capital invested in the manufacturing sector to increase to Dhs162.7bn by the end of the fiscal year 2017, compared to Dhs110.2bn in 2010, marking an increase of about Dhs52.5bn at a rate of 48%.
The report estimates the number of industrial units for the same period (2010-2017) to increase by 2,812 units, from 4,960 units in 2010 to approximately 7,142 units by 2017, with an estimate growth rate of 44%. Accordingly, the size of the labour force in this sector is expected to grow by 198,539 workers, from 382,012 in 2010 to around 580,556 workers by the end of 2017, marking an increase of 52%.
The report also identifies a set of important recommendations for the industrial sector, stressing the need to speed up the process of drafting, approving and enacting a new industrial legislation, since it forms the backbone for the entire industrial sector, calling for the establishment of an independent ministry of industry, concerned solely with the vital issues of this sector, with the responsibilities of restructuring, regulating and drawing policies and developing related strategic plans across the country. Additionally, the report stressed the need for identifying current schemes of industrial investments across the country and mapping major activities that should be carried out to attract local, regional and international investments while benefiting from the latest technology in the industrial sector.
Lastly, the report recommended the establishment of specialized industrial-related financial institutions, in addition to Emirates Industrial Bank, to focus on serving this sector and encourage current financial institutions to provide proper industrial related funding, as well as establishing an independent authority for supporting and developing industrial exports.