Owing to increased government support and funding, the UAE’s manufacturing sector was among the largest non-oil contributor to Dubai’s GDP since 2009, according to the Dubai Manufacturing Sector Snapshot report published by Dubai Exports, an agency of the Department of Economic Development (DED), Government of Dubai.
The manufacturing sector ranked as the fourth highest contributor to GDP at 13.2 per cent or Dhs38.72 billion, after Wholesale Trade, Retail & Repair; Transport/Storage/Communication; and Real Estate & Business activities at 30 per cent (Dhs89 billion), 14 per cent (Dhs41.54 billion), and 14 per cent (Dhs40.29 billion) respectively.
The sector also employs 8 per cent of Dubai’s total workforce, proportional to its total contribution to GDP an indication that the sector functions at relatively reasonable levels of productivity.
In addition, based on constant levels of pricing, the manufacturing sector has experienced an average growth of 8 per cent per annum between 2007 and 2010, despite a sharp decline in the curve between 2008 and 2009. In 2010, the manufacturing GDP growth posted 11 per cent as compared to 6.20 per cent in 2009.
Currently, Dubai’s annual industrial production is estimated at approximately Dhs200 billion, with total exports of Dhs68 billion accounting for 34 per cent of the total production. Export of Gold products constituted 60 per cent of the total export value. The growth in the value of direct exports correlated with growth in manufacturing GDP, indicating that exports sustained industrial growth during the financial crisis.
In 2010, Dubai’s external trade activity exhibited recovery with increase in direct and Free Zone exports. Direct exports in 2010 posted Dhs68 billion, a 24 per cent increase from Dhs52 billion in 2009, while Free Zone exports were valued at Dhs143 billion as compared to Dhs112 billion in 2009, a hike of 28 per cent.
“Dubai is the ideal location providing world class trading platform for a wide array of commodities. This Manufacturing report findings show a growing export market with significant opportunities for Dubai manufacturers. The Dubai government, realise the importance of diversifying sources of income and increasing the participation of the industrial and the export sectors in increasing the country’s GDP,” said Engineer Saed Al Awadi, Chief Executive Officer, Dubai Exports.
The make-up of the manufacturing sector in 2009 showed that at Dhs18.1 billion per firm, Basic Metal production is the most capital and labour-intensive activity, followed by production of Non-Metallic Minerals at Dhs1.84 billion.
The largest numbers of manufacturing firms are involved in Fabricated Metal & Equipment, and Wood Products including Furniture, with 634 and 299 of employees, respectively.
The investments are derived primarily from local sources, while foreign investments constitute roughly 8 per cent of the total capital.
From / Gulf Today