UAE: Abu Dhabi

Following the significant increase in non-oil merchandise trade in 2011, market participants in the local transport and logistics sector appear to be preparing for a continued rise in activity in 2012, with one Abu Dhabi-based shipping firm recently investing $44m in a new vessel.

With Abu Dhabi having invested heavily in building new attractions to draw in visitors, tourism officials are now busy promoting the emirate in a number of other markets, such as China and Saudi Arabia. Their efforts appear to be paying off, with a rise in the number of hotel guests coming from key source markets during the first half of 2012.

Growth in lending at the emirate’s top banks remained slow during the first half of 2012, but profits were generally up on those of the previous year. Meanwhile, the banking sector is preparing to comply with a new regulation from the Central Bank of the UAE that has been designed to reduce exposure to government-related entities (GREs).

The transport and logistics sector is about to get a major boost, with a new port and cargo handling facility set to ease congestion and encourage long-term industrial development.

With the first phase of the Khalifa Industrial Zone Abu Dhabi (KIZAD) projected for completion in the fourth quarter of 2012, Abu Dhabi’s manufacturing base looks set to expand significantly over the next few years. Authorities from Abu Dhabi Ports Company (ADPC), the state-owned entity that is developing KIZAD and other manufacturing zones and ports in the emirate, are confident that KIZAD’s low-cost business environment and links to transportation infrastructure will help ensure its success.

Buoyed by positive growth in 2011, Abu Dhabi looks set to see a strong economic performance again this year. Though efforts to diversify the economy continue, high oil prices ensured that energy was the emirate’s strongest performer last year, even as non-oil sectors’ contribution to GDP increased.