The UAE’s non-oil economy is steaming ahead at a pace that signals the economy is turning a corner.
The Emirates NBD PMI, a key gauge of the country’s non-oil sector, gained pace at the fastest rate in 30 months as growth in new orders and output picked up.
New export orders increased for the first time in three months, thanks to international demand, particularly from Arabian Gulf countries, according to the survey, produced by IHS Markit.
New projects and competitive pricing are propping up demand and activity in the non-oil sector, in line with the bank’s view that investment in the lead-up to Expo 2020 will be a catalyst for growth.
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[ Recovery of non-oil economy in UAE and Saudi Arabia gains momentum ]
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The latest findings of the survey regarding non-oil economic growth chime with forecasts from the Central Bank of the UAE and economists including the IMF and Bank of American Merrill Lynch.
Although there are no official economic growth projections for the UAE, the central bank of the UAE said in its first quarter economic review that growth in non-oil GDP will rebound this year to 3.1 per cent and to 3.7 per cent in 2018, thanks to easing of fiscal consolidation and growth in the UAE’s trading partners. The UAE economy grew 3 per cent last year, according to the Central Bank.
Both IMF and Bank of American Merrill Lynch concur that the UAE’s medium term non-oil growth will reach 3 per cent or higher, thanks to investments related to Expo 2020 and the resilience of the country’s non-oil sector.
The health of the non-oil economy is also exhibited in the property sector, which is expected to benefit from Expo 2020 projects, according to UK property consultancy Cluttons.
Although it is forecasting a dip in residential rentals for this year, it expects the Dubai market to perk up in run-up to the event.
But the recovery in the real estate market is not limited to Dubai.
Neighbouring Sharjah is enjoying robust real estate activity, with the announcement of a Dh24 billion development, largest-ever mixed-use project in the emirate that will cater to 70,000 people when it is completed in 2025.
The project, launched by Sharjah-based real estate developer Arada, will be partly funded by equity from Arada’s founding partners – Basma Group and KBW Investments, a firm controlled by Saudi Arabia’s Prince Khaled bin Alwaleed bin Talal.
Saudi investment in the ambitious project is another sign that the UAE economy is gaining ground.
