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Performance of industrial sector of Abu Dhabi continues to improve in first half of 2014

posted on 28/04/2015: 2431 views



Preliminary data for the performance of the industrial sector in Abu Dhabi 2014 has suggested that the manufacturing industry is going to achieve a growth rate of 10.4% assuming fixed prices. This was according to economic predictions issued by the Abu Dhabi Department of Economic Development, ADDED.

According to the performance index of the industrial sector of Abu Dhabi, issued by the Studies Department of the Abu Dhabi Department of Economic Development in 2014, the prices of industrial products have improved in 2014 compared with 2013. Trends of records of industrial producer prices, issued by Statistics Centre-Abu Dhabi, showed a continuing quarterly improvement in prices of industrial products in 2014, compared to the previous year.

The index recorded about 100.2 points in the first quarter, 101.4 points in the second quarter and 99.2 points in the third quarter. The increase in the index value was 0.1, 4.2 and 0.8% in the mentioned above periods respectively compare with the same periods in 2013.

The economic vision of Abu Dhabi gives great attention to industrial activities, especially non-oil activities, to increase its participation in GDP and to achieve the promotion of economic diversification in Abu Dhabi. Abu Dhabi has gone so far to achieve this goal, it gives a great priority to developing the activities of the manufacturing industry.

In this regard, the Industry Development Office was established as an organising authority to supervise implementation of the industrial strategy and to promote the performance of the industrial sector in Abu Dhabi, besides the operational authorities in the sector like Khalifa Industrial Zone, Kizad, Higher Corporation for Specialised Economic Zones, etc.. The Industry Development Office is currently preparing a survey of the establishments for providing an up-to-date database.

The data issued by Statistics centre-Abu Dhabi reflects an increase in participation of the manufacturing industry to GDP in 2013, the total value added to the activity of manufacturing industry with fixed prices in 2013 was Dh41,757 million, compared with Dh38,319 million 2012, growth rate was 9% in 2013 compared with 1.3% in 2012.

The levels recorded by the index of performance of the industrial sector and results of the survey of the working industrial establishments in Abu Dhabi has showed a continuing improvement in the performance of the industrial sector in Abu Dhabi in the first half of 2014 as it was in 2013.

Improvement in the level of optimism in the industrial establishments is attributed to the high levels of optimism towards the current and future situation. The establishments have showed high levels of optimism towards the current situation which made the index reach 28 points compared with 18 points in 2013. This reflects a lot of improvements in the work environment in the industrial establishments of Abu Dhabi.

The sub-index of the future situation reflects the optimism of the industrial establishments towards the future situations, which reached 50 points in 2012 compared with 44 points in 2014, which reflects an increase in optimism level of the industrial establishments.

Regarding the geographical area, optimism levels have improved in all areas in 2014. Optimism levels were very high regarding the industrial establishments working in Abu Dhabi and Al-Ain.

The results of the index of performance of the industrial sector in Abu Dhabi have showed a great improvement in the performance of the industrial establishments in 2014 compare with 2013. Sales volume has increased in general in both domestic and foreign markets, and production has increased as well. Rates of capacity utilisation in industrial establishments increased.

It was motivated by the increase in the rate of growth in Abu Dhabi in 2013, the governmental implementation of the great projects in Abu Dhabi, improvement of stock markets, the increase in demand volume and the improvement in work environment and especially investment, which explains what the establishments said about the increase of the invested capital in 2014 compare with 2013.

Establishments working in the food industry are considered the most optimistic about the current and future situations because of the increase of sales, improvement of inventory and high levels of capacity utilisation.

Establishments working in electricity, gas and water supply have showed less optimism towards the current situations because of the products prices and capacity utilisation.

As for obstacles facing industrial establishments, most obstacles include only supply, as about 14% of establishments reported that they are facing obstacles in this regard, while about 9% referred to obstacles in both supply and demand, and the great majority, about 76 % of the industrial establishments, reported that there are no obstacles facing their activities.

On obstacles which they face as industrialists, they referred to the difficulty of getting a qualified labour force with the required skill sets, wage increases, continuing difficulty of labour accommodation, rise in costs and prices which represents a burden on the feasibility of industrial projects, the rise in raw materials prices, production input and limited demand for products.

They also added that there are other obstacles like rise in charges, competition, incomplete infrastructure, obstacles related to laws and governmental procedures like customs, work, workers and licenses to get loans, which represent a loss to the establishment in that period, the rise in interest rates, the short period repayment and link finance with the volume of the establishment.

Apparel and leather and petrochemical industries are considered industrial activities which face more obstacles than others, while the obstacles facing recycling activity and the timber industry are the least.

Ratios of utilised energy in factories vary according to the activity. The highest rates were at furniture, recycling, metal and formed metal industries, while the lowest rates were at apparel and leather, electricity, gas, and water industries despite the improvement in 2014.

The average of capacity utilisation in the factories of Abu Dhabi was 72% in 2014, a rise of 4 percent from 2013, there was an increase in the utilised energy in many industrial activities.

As for the main reason of lack of labours, especially experienced labour, according to the survey, it lies in the hardness labour laws, especially regarding the number of labourers brought from abroad, laws related to workers' accommodation in ICAD, rise in costs, charges and fines related to issuing licenses and identity cards, the rise in the wages of skilled labour and their leaving the job after training.

As for the capacity of industrial establishments in Abu Dhabi and its effectiveness in foreign markets, the percentage of establishments which target foreign markets has increased in 2014 compare with 2013. The results of the survey in 2014 reported that 4% of the respondent establishments target foreign markets which reflects their weak marketing ability, especially for small establishments, in addition to the rise in costs of obtaining raw materials which affects the competitive products. – Emirates News Agency, WAM –

http://www.wam.ae/en/news/economics/1395279777676.html

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