TRENDS THE LATEST REPORTS AND ANALYSIS OF THE UAE MARKET
With
one year to go before Dubai welcomes the world to Expo 2020 on 1 October 2021,
Expo is ready to convene the global community in a spirit of cooperation and
creativity to create a strong, prosperous future for all. The Expo is expected
to add a great amount of dirhams to the Dubai and UAE economies, although it is
difficult to estimate a specific amount.
As
we move on to the year of the Dubai EXPO 2020, the upturn will definitely be
visible across different markets, related to recruiting operation and consumer
sentiment. Projected market confidence is expected to have a positive effect
across the hospitality, retail, and tourism markets, flowing through to create
an increased demand for organizational and delivery-based work across a number
of disciplines.
Although
many of us think of EXPO 2020 as a six-month affair, the themes and legacy will
be even more meaningful. This legacy will in many ways build the next upward
trend in the Dubai job market, as a more inward investment and industry
start-ups are drawn by the notion of technological advancement and
sustainability. There is a belief that EXPO 2020, along with the advancement of
Artificial Intelligence, could and should be a spark for a new wave of market
focus on environmentally sustainable strategies that are the new and more
productive driver of growth.
Each
of these points has contributed to and affected the UAE and the regional
economic context in their own way. To establish a buoyant economic environment
within the UAE, particularly for Dubai as the commercial hub of the region, the
importance of the '3 Ts' (Travel, Tourism & Trade) is as significant as
ever.
Also,
Abu Dhabi will see a sharp decline in real GDP growth in 2020, as economic
activity is weighed on by a combination of declining oil demand, decreased
government expenditure and Covid 19-related social distance constraints. Fitch
Solutions expects a 6.0 percent decline, marking a decade-long lowest point.
Although they expect a revival in 2021, slow global growth and confusion about
the course of the Covid-19 pandemic will moderate the rate of recovery, largely
on the basis of a revival in oil output.
The
first half of 2020 was more challenging for the UAE project sector than for its
neighbors, with contract awards down more than a third from the same timeframe
last year. As with neighboring markets, Covid-19 was a factor, but it obscured
the fact that, due to over-supply in its real estate industry, the market was
already in sharp decline.
The
problem is caused by the federation's vulnerability to the global shutdown of
tourism and a decline in spending on aviation and shopping. Despite a series of
government announcements and economic stimulus measures, it is clear that some time
will pass before the economy will rebound to its pre-2015 rate.
Contractors
and consultants will gradually look at the government infrastructure sector as
a source of new project opportunities in the absence of a thriving property
sector. As businesses strive to gain a smaller pool of potential market
opportunities, water, electricity, road, and other transport networks would
take on greater significance.
Many
federally active project companies have responded by reducing margins in the
face of increased competition or by concentrating on other countries,
particularly Saudi Arabia. Others have downsized to lower prices or have
entirely left the market.
Companies
would have to be smart in this demanding world in order to succeed. Choosing
the best markets, concentrating on niche industries, and implementing novel
innovations are all devices that businesses should use to remain ahead of the
market.
However,
it is not just doom and gloom. Some sectors are growing, especially water and
renewable energy. Oil and gas investment is also expected to rise over the coming
year. Though UAE is said to be suffering a little now, with the help of EXPO
2020, they are showing promises for a better future.

