Low oil prices hit UAE job growth, new report shows
The signs of a slowing job market in the UAE because of falling oil prices have started to appear.
A report from the recruiting company Morgan McKinley yesterday showed that professional hirings fell by 1 per cent in the second quarter to 8,109 compared with 8,213 in the first three months of the year.
“The oil price went back up to $60 per barrel towards the end of the quarter, but it needs to go up by a further $5-$10 a barrel to make new drilling and exploration projects viable,” said Trefor Murphy, the managing director for the Middle East and North Africa at Morgan McKinley, in the report.
Brent oil price closed on Friday 2 per cent lower at US$52.21 per barrel, which is a more than 50 per cent drop since peaking at $115 in June last year. An oil supply glut, weaker demand in Asia and Europe and a strong dollar have pushed oil prices lower this year.
There was also a 6 per cent drop in the number of professional job seekers between the first two quarters. The slow summer months and the start of Ramadan in June also contributed to the slowdown in seekers and new hires over the period.
“The number of job seekers has decreased. This is quite worrying, as there are many other options available for them – if you look at the employment market in the United Kingdom, Ireland, America, Australia and Asia, there is no need to come to the UAE any more and yet two years ago everyone was looking to work in Dubai,” said Mr Murphy.
The professional recruitment market will generate 5 to 10 per cent growth per quarter for the remainder of the year, depending on the oil price level, the company’s report said.
Morgan McKinley is forecasting an increase in investments in the financial field, particularly in the financial free zones of Dubai International Financial Centre and the Abu Dhabi Global Market, which would aid the job market growth in the second half.
“There will also be big infrastructure, property, oil and gas projects as well as alternative energy ones,” said Mr Murphy.
The banking sector is one industry that is expected to grow, given the UAE banks’ international expansion plans into countries such as Egypt, Indonesia and Pakistan.
Fast-moving consumer goods, pharmaceutical, medical device, hospitality, airline and tourism sectors have also been active in terms of hiring.
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Updated: August 2, 2015 04:00 AM