Manufacturing contributes 13 percent to Dubai’s GDP
Dubai is the ideal location providing world class trading platform for the manufacturing of a wide array of commodities
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The UAE’s manufacturing sector was among the largest non-oil contributor to Dubai’s GDP since 2009, according to a report published by Dubai Exports, an agency of the Department of Economic Development (DED).
The manufacturing sector ranked as the fourth highest contributor to GDP at 13.2 percent or Dh38.72 billion ($10.54 billion), after wholesale trade, retail & repair; transport/storage/communication; and real estate & business activities at 30 percent (Dh89 billion), 14 percent (Dh41.54 billion), and 14 percent (Dh40.29 billion) respectively, said the Dubai Manufacturing Sector Snapshot.
The sector also employs 8 percent of Dubai’s total workforce, proportional to its total contribution to GDP – an indication that the sector functions at relatively reasonable levels of productivity, the report said.
In addition, based on constant levels of pricing, the manufacturing sector has experienced an average growth of 8 percent per annum between 2007 and 2010, despite a sharp decline in the curve between 2008 and 2009. In 2010, the manufacturing GDP growth posted 11 percent as compared to 6.20 percent in 2009.
Currently, Dubai’s annual industrial production is estimated at approximately Dh200 billion, with total exports of Dh68 billion accounting for 34 percent of the total production. Export of Gold products constituted 60 percent of the total export value.
The growth in the value of direct exports correlated with growth in manufacturing GDP, indicating that exports sustained industrial growth during the financial crisis.
In 2010, Dubai’s external trade activity exhibited recovery with increase in direct and Free Zone exports. Direct exports in 2010 posted Dh68 billion, a 24 percent increase from Dh52 billion in 2009, while Free Zone exports were valued at Dh143 billion as compared to Dh112 billion in 2009, a hike of 28 percent, a statement said.
“Dubai is the ideal location providing world class trading platform for a wide array of commodities. This Manufacturing report findings show a growing export market with significant opportunities for Dubai manufacturers,” said Saed Al Awadi, chief executive officer, Dubai Exports.
“The Dubai government, realise the importance of diversifying sources of income and increasing the participation of the industrial and the export sectors in increasing the country's GDP.”
The make-up of the manufacturing sector in 2009 showed that at Dh18.1 billion per firm, basic metal production is the most capital and labour-intensive activity, followed by production of non-metallic minerals at Dh1.84 billion.
The largest numbers of manufacturing firms are involved in fabricated metal and equipment, and wood products including furniture, with 634 and 299 of employees, respectively.
Meanwhile, only 3 percent of the total industrial firms have investments exceeding Dh50 million and most of these industrial firms are in the non-metallic minerals products, and food, beverages. The investments are derived primarily from local sources, while foreign investments constitute roughly 8 percent of the total capital.
In terms of labour strength, the metal fabrication segment has the highest number of companies that hires more than 100 employees per firm, including the most firms to employ 10 people or less, while 84 percent of industrial firms in various segments have employment strength less than 100 persons.
Meanwhile, 56 percent of all industries are located in the Jebel Ali Free Zone, while 16 percent are in Al Quoz and 13 percent in Al Qusais.