Higher optimism and confidence in Abu Dhabi's economic performance in Q2 2016

ABU DHABI, 29th October, 2016 (WAM)– The overall reading of the results of development indices in Q2 2016 reflects higher optimism and confidence amongst consumers and business community in the Emirate’s economic conditions, according to a new report, released on Saturday by Studies Directorate of Abu Dhabi Department of Economic Development.

This follows the moderate economic growth in Q1 of 2016, while Abu Dhabi and UAE continue their efforts to contain the economic impacts of the international economic developments, especially, the continuous fluctuations in oil markets, the Abu Dhabi’s Economic Performance Report for Q2 2016, issued in co-operation with Statistics Centre – Abu Dhabi (SCAD), noted.

The report reviews Abu Dhabi’s economic performance during the said period by way of a detailed reading of the results of development indices, including “Consumer Confidence Index in the Economic Performance, Business Cycle Index, Index of Confidence in the Business Climate, National Family Status Observatory, and Labor Market Demand Indicator.”

With regard to consumer confidence, the General Index for Consumer Confidence showed higher optimism among consumers in Abu Dhabi across different demographic and social characteristics in Q2 of 2016. This was a result of their better expectations of the future economic conditions and brighter outlook for the impacts of the consumer-related measures and procedures taken under the applicable economic policies.

As for the business sector, the General Index of Confidence in the Business Climate and its sub-indexes have shown higher optimism amongst business establishments of various activities and places in Q2 of 2016 as the performance of the general indicator was affected by Establishments’ better evaluation of their own internal conditions, their business sectors and the Emirate’s economy as a whole in the same quarter, compared to Q1 of 2016, which in turn affected establishments’ optimism levels.

The report also pointed out that Business Cycle Index showed an upward trend in Q2 of 2016 due to the improved performance of its sub-indexes, which reflects the attractive business environment and investment climate of the Emirate.

Ali Majid Al Mansouri, ADDED Chairman, stressed that Abu Dhabi’s macro economy in Q2 of 2016 has been consistent with the prospects, compared to its moderate growth rate in Q1 of the same year. He also pointed out that the latest estimates issued by SCAD indicate that the GDP of Abu Dhabi (at the fixed prices) have reached around AED198.8 billion in Q2 of 2016 with a growth rate of 2.3 per cent, compared to the same period of 2015.

He pointed out that non-oil sectors enhanced the economic growth in Abu Dhabi in Q2 of 2016 as non-oil GDP growth rate, at fixed prices, reached 3.6 per cent in that quarter.

As per SCAD estimates, he added, the relative contribution of non-oil activities to Abu Dhabi’s GDP increased to 51.5 per cent in Q2 of 2016 compared to roughly 50.9 per cent in Q2 of 2015.

This reflects the growing role of Abu Dhabi’s non-oil sectors in accommodating the economy with the challenges related to the international economic developments, including fluctuations in oil prices, and transforming these challenges into an opportunity to promote economic diversity by enhancing non-oil activities.

Al Mansouri stated that the performance of Abu Dhabi’s non-oil sectors in Q1 of 2016 reflects a moderate rate of growth and the flexibility of Abu Dhabi economy.

He also pointed out the importance of the Abu Dhabi economy’s success factors related to strong financial conditions, competitive business environment, attractive investment climate and social stability. Such factors enable the economy to adapt to challenges related to the global economy’s unfavorable developments and transform them into an opportunity to go forward and promote the economic diversity in order to achieve the goals of Abu Dhabi economic vision 2030.

On the sectoral level, Abu Dhabi’s Economic Performance Report in Q2 of 2016 showed that Q2 of 2016 data indicates a stable performance of some economic sectors in Abu Dhabi, according to the data of tourist facilities, foreign trade and real estate sectors.

For the stock exchange market, and although closure price in ADX on 30 June 2016 was high, compared to closure price on 31 March 2016, quarterly performance reports of the facilities listed in the capital market revealed relative profit decline in the same period, compared to Q1 of 2016.

As for the tourist sector, the report indicated that the latest data issued by Abu Dhabi Tourism and Culture Authority showed higher number of guests by 3.31per cent in that period compared to the same period in 2015. However, the hotel facilities’ performance in Q2 of 2016 relatively declined, with regard to the hotel nights, occupancy rate and total revenues.

The data indicates that family spending in Abu Dhabi is affected by the international, regional and local economic developments, especially with lower global demand and the uncertainties facing economies of countries such as Japan, China and UK.

As for real estate sector, the report showed that the data issued by SCAD shows that the rental index value of the housing units in Abu Dhabi was 102.1PP in June 2016, compared to around 108.5PP in the same month in 2015, falling by 5.85 per cent (6.4PP).