Industrial activity is on the rise in the UAE to achieve sustainable economic diversification under the UAE Economic Vision 2030. The government is targeting on increasing the contribution of the manufacturing sector to the overall GDP from its current 11% to 25% by 2025. Thus, the manufacturing sector is growing at a rapid pace and is projected to reach USD XX billion by 2021 at a CAGR of XX%. Physical capital investment, greater exposure to trade, competition in the sector, and aggressive advertising through various channels are factors affecting the growth of this market.
Surplus Capital Helping UAE ‘Skip the Queue’
The oil and gas market in the UAE has boosted the country’s economic growth and has provided it with huge capital to invest in other sectors like manufacturing. Hence, UAE never had to pass the hypothetical stages of development, of the lack of capital, which most of the developed countries had to.
In terms of revenue, the support from the government makes the manufacturing sector second only to the gigantic oil and gas market. Recently, many new manufacturing units have been set up and foreign direct investments have also been welcomed. Currently, Abu Dhabi is emphasizing on heavy industries, as they have inexpensive energy sources; while the Emirates of Dubai and Sharjah are focused on light industries and service sectors.
Machinery Import for Manufacturing Industries Slowing Down Innovation
Not having a history in the manufacturing sector has led to the lack of availability of adequate machinery in the country. Innovations in this sector are not at par with the levels set in the construction sector and hence, new and latest machinery are being imported.
The setting up of the Dubai Industrial Park spread over an area of 55 square kilometers, currently housing over 680 companies; speaks for the bar set by the UAE.
Net profits of manufacturing companies have increased by nearly 50-100% in the past few years. This is the major reason for the recent influx of a large number of foreign laborers. This has also led to Dubai’s sudden growth in the construction sector and similar forecasts are now being seen for the manufacturing sector.
Dubai is expected to become the biggest trade hub in Asia by 2021.
The report includes market segmentation of manufacturing industries in the region which are into automobiles, plastics processing, textiles, capital goods etc. with data on production, consumption, trade, prices, and trends.
Key Deliverables in the Study