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UAE's manufacturing sector slows down

The UAE's manufacturing sector is starting to show signs of slowing down, as its share in the country's gross domestic product (GDP) has declined by 1.2 per cent between 2001 and 2006, a report said yesterday.

  • By Cleofe Maceda, Staff Reporter
  • Published: 00:05 July 17, 2008
  • Gulf News

Dubai: The UAE's manufacturing sector is starting to show signs of slowing down, as its share in the country's gross domestic product (GDP) has declined by 1.2 per cent between 2001 and 2006, a report said yesterday.

Data compiled by the Ministry of Economy shows that the manufacturing sector's share of the country's total non-oil GDP has slumped from 20 per cent in 2001 to 18.8 per cent in 2006, averaging 19 per cent during the period.

While the sector is still the leading non-oil GDP contributor, a review by the Dubai Chamber of Commerce and Industry, shows that other forms of businesses are fast catching up, with the trading sector posting promising growth from 12.7 per cent in 2001 to 16.9 per cent in 2006.

Job opportunities in the manufacturing industry are also apparently stagnant, as the sector's share in total employment stood at about 13 per cent throughout 2001 to 2006.

Another downside is that the sector is not yet playing a substantial role in the foreign trade, since exports of manufactured products represent a mere 3.5 per cent of the total exports. The Dubai Chamber said the figures are alarming and should serve as a sign that something needs to be done to promote industrial development in the UAE.

"This means that the share of other sectors in GDP are growing faster than the manufacturing sector, an alarming signal for the sector and a call for more attention to promote industrial development of the country," the Dubai Chamber said in its report.

The manufacturing industry, whose real GDP stood at Dh54.4 billion in 2006, plays a major important role in the economy.

Its average share in the non-oil total production from 2001 to 2006 was the highest, accounting for 23 per cent. The construction, government services and trade sectors only contributed 16 per cent, 12.1 per cent and 11.9 per cent respectively.

About 17 per cent of the UAE gross fixed capital is created in the manufacturing sector, the second highest after transport and communication sector.

The manufacturing sector also ranks third in the list of top job providers in the UAE, securing about 306,000 jobs on average between 2001 and 2006, or about 13 per cent of the country's total workforce.

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