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October 22, 2020

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.


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