Property, finance and manufacturing collectively emerged as the biggest drivers of Abu Dhabi’s economic growth last year, taking up the slack from slowing expansion in the oil and gas sector.
In terms of relative contribution, the trio accounted for about a third of the emirate’s overall real GDP growth of 5.18 per cent, slightly more than the oil and gas sector, according to real GDP data released yesterday by Statistics Centre Abu Dhabi (Scad) and analysed by National Bank of Abu Dhabi (NBAD). They helped GDP growth motor at a faster rate than the 4.8 per cent clip achieved in 2012.
“Non-oil growth is mainly driven by manufacturing and then financial and real estate sectors,” wrote Alp Eke, the senior economist at NBAD in an email. “Kizad [Khalifa Industrial Zone Abu Dhabi], even though it is not fully operational, is having an impact also.”
Activity in Abu Dhabi’s property market has picked up at a brisk pace since a glut of supply prompted a downturn during the 2009 global financial crisis. Property prices leapt by about a third last year, while Aldar Properties, the largest developer, has announced a flurry of projects in the past year after merging with Sorouh, another developer. Similarly, the performance of financial services has recovered after a tide of bad loans receded in the banking system and asset valuations recovered. Manufacturing is also expanding, led by Emirates Global Aluminium, Emirates Steel and Borouge, the emirate’s industrial heavyweights.
Real non-oil GDP grew by 7.4 per cent last year, up from 5.9 per cent the previous year, showed Scad’s data. The growth figure falls in line with Abu Dhabi’s 2030 vision, which aims to reduce reliance on hydrocarbons.
The oil sector grew by 3.2 per cent during the year, down from 3.8 per cent the year before.
In real GDP terms, the data showed the contribution of the non-oil sector to the economy rose to 48.6 per cent last year, up from 47.6 per cent the year before.
Other data released yesterday also showed the buoyancy of the non-oil economy.
The headline reading of HSBC’s UAE purchasing managers’ index, which tracks performance in the non-oil private sector, showed activity reached 57.3 points last month, down slightly from April’s record high of 58.3. The pace of expansion in business output was the second quickest in the history of the series. The data also showed a further marked rise in staffing levels.
“Output and new orders both continue to grow well and the labour market is in rude health. These would be good numbers at the best of times – given the weakness affecting so many other emerging markets, the data is better still,” said Simon Williams, the chief economist for Middle East and North Africa at HSBC.
The UAE’s headline score was higher than in neighbouring Saudi Arabia. The kingdom’s PMI reading ebbed to 57 last month, down from 58.5 in April and matching March’s 16-month low. Export order growth eased to 54.6, down from 61.4 in April, reflecting weaker demand in export markets.
tarnold@thenational.ae
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