The value of Abu Dhabi's economy exceeded Dh1 trillion for the first time in 2011 driven by increased spending in the manufacturing sector, the latest data show.
The Statistics Centre-Abu Dhabi (Scad) released revised economic data yesterday showing that nominal GDP in 2011 grew by 29.9 per cent year on year to Dh1.06tn, providing further evidence of the emirate's continuing recovery.
"The results demonstrate the robustness and stability of the emirate's economy, attesting to its massive competitive edge over regional and global economies and boosting its appeal to local and foreign investors," said Scad.
In July, Scad reported that the emirate's nominal GDP, which is not adjusted for inflation, rose by almost 30 per cent to Dh806bn last year. Scad reported that real GDP growth in 2011, which does take inflation into account, was 6.8 per cent compared with the year before. Last year, the Department of Economic Development estimated that the real rate of economic expansion in Abu Dhabi will reach 5.7 per cent before 2016 after increasing 3.9 per cent in 2012.
In yesterday's statement, Scad reported that the total number of workers employed across the economy climbed 3.5 per cent to 1.463 million in 2011 from 1.413 million in 2010. The construction sector accounted for 617,000 of those in 2011, the highest proportion of all sectors. Total wages grew by 7 per cent during 2011 to Dh108.369bn, up from Dh101.265bn in 2010. Wages in this case account for all wages and salaries in cash, benefits in-kind and social benefits paid to employees.
The final GDP figure was boosted by a 10 per cent increase in gross capital expenditure across all sectors to Dh123.98bn, according to the Scad survey of economic activity in the emirate. Manufacturing accounted for the largest chunk of that spending with a 22.8 per cent share, followed by oil & gas with almost 20 per cent. The property sector was third overall with 16.2 per cent while transportation and storage accounted for 15.3 per cent of the overall figure.
Much of the growth was probably attributable to the recovery of oil prices during 2011, having fallen sharply to lows of US$33 per barrel after the global financial crisis, said Said Al Shaikh, the chief economist at Saudi Arabia's National Commercial Bank.
During 2009, the sudden dwindling of government oil receipts depressed capital expenditures across the Arabian Gulf region, he said.
"Most of the GCC economies contracted due to the fall in oil prices … There were some projects that were on hold or which had troubles, and I see the same thing applicable to Abu Dhabi," he said. A recovery began in 2010 as oil prices closed in on $90 per barrel before strengthening to about $107 per barrel a year later, added Mr Al Shaikh. "There's more confidence that oil prices are rising and will continue to rise," he said.
The oil and gas sector accounted for 41.7 per cent of the total gross output of economic activities in 2011, followed by manufacturing with 16.6 per cent and construction with a 15.6 per cent share, down from 18.8 per cent in 2010, according to Scad.
"The plans and strategies recently adopted by Abu Dhabi emirate envisage a growing role for [both] local and foreign investment in future development projects," said Scad. "Several factors must combine to create a favourable business environment that can contribute effectively towards building a diversified, broad-based economy … [Thus] particular attention is therefore being paid to the private sector to empower its development role."
The diversification of the emirate's economy away from its reliance on oil is one of the key objectives of Abu Dhabi Economic Vision 2030. The plan seeks to reduce the emirate's reliance on oil to 36 per cent of GDP by 2030.