Green shoots look brighter in Dubai

Dubai's economy is recovering. The number of business licenses issued in the first quarter increased over the same time last year, and the emirate's Business Confidence Index touched 120 points.

A range of economic indicators are pointing to a strengthening recovery in Dubai. (Pawan Singh / The National)
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A growing range of economic indicators point to a strengthening recovery in Dubai.

The number of new trade licences issued jumped in the first quarter over the same period last year. Business confidence is picking up. And one free zone attracted companies at the rate of five a day.

"You can certainly feel that in the first quarter of 2012 there is an increase in economic activity," said Sean Evers, the founder of Gulf Intelligence in Dubai. "Dubai is experiencing an economic recovery it hasn't seen in the last three to four years."

The number of new trade licences the Dubai Department of Economic Development (DED) issued in the first quarter increased by 27 per cent over the same period last year.

A DED survey showed the composite Business Confidence Index for Dubai was at 120.5 points for the first quarter this year. The index crossing 100 points is a sign of investor confidence, according to the Dubai DED. The manufacturing sector is particularly upbeat about sales revenues in the second quarter, followed by services and trading sectors.

And the Dubai Multi Commodities Centre attracted 612 companies to Jumeirah Lakes Towers free zone between January and last month, including 100 companies from India alone.

"The DED indicators are quite new but they back up quantitively what we are seeing," said the HSBC economist Liz Martins.

Anecdotal indicators such as an increase in traffic on Sheikh Zayed Road, or a rise in rents in some parts of Dubai, also indicate a resurgent economy, she said.

Dubai has also benefited from its haven status compared with more volatile countries of the region, and in particular those involved in the upheaval of the Arab Spring.

The number of visitors to Dubai increased by 10 per cent last year over the previous year partly because of unrest in other Middle East countries, according to HSBC's report on Dubai's economic outlook released this month.

The DED's report on the rise in new trade licences shows "the growing investor interest in engaging in diverse business activities in Dubai," said Mohammed Shael Al Saadi, the chief executive of business registration and licensing at Dubai DED. Commercial trading licences comprised the majority of the new licences issued, followed by professional, industrial and tourism licences. General trade remains the busiest among 10 licensed commercial activities.

This week, the Abu Dhabi Government is expected to release the figures on new trade licences issued in the emirate for the first quarter of this year.

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