The Organization of Petroleum Exporting Countries (OPEC) said that the non-oil sector in the United Arab Emirates showed strong growth throughout the past year 2023, and this dynamic is likely to continue in 2024.
Non-oil economic growth
In its January report, OPEC revealed that the prospects for non-oil economic growth in the UAE indicate continued momentum. This growth is supported by increased business confidence, government initiatives, and expansion in household spending.
Moreover, OPEC indicated that the Purchasing Managers’ Index (PMI) for the non-oil sector reached 57.4 in December 2023. That is compared to 57 in November. This growth aligns with the expansionary trend the UAE observed over the past few years. The current increase in activity is also supporting job creation, the report further revealed.
Dubai’s real estate sector
OPEC’s report also revealed that the real estate sector in Dubai remains strong, with sales reaching their highest levels in the past decade.
Moreover, OPEC indicated that tourism in the UAE is witnessing a recovery. It contributes about 16 percent to the country’s gross domestic product (GDP) directly and indirectly through its impact on the supply chain and related spending, according to Oxford Economics.
Dubai International Airport
OPEC’s report also highlighted that Dubai International Airport, the busiest international airport in the world, exceeded pre-pandemic passenger levels. Thus, the number of visitors to Dubai increased by 22 percent annually reaching 13.9 million from January to October 2023.
Earlier, the UAE’s non-oil sector recorded its highest level in more than four years in December, as indicated by the seasonally adjusted Standard & Poor’s Global Purchasing Managers’ Index (PMI). The impressive growth, driven by significant increases in production and new orders, positions the sector for continued expansion in 2024.
Read: Davos 2024: IMF’s analysis of the global economic outlook for the year ahead
Strong growth
The December PMI rose to 57.4, from 57 in November, recording its highest reading since mid-2019. This growth indicates a strong improvement in the health of the UAE’s non-oil sector. Increases in both production and new orders contributed significantly to this growth. Furthermore, data indicates that economic trends in the UAE’s non-oil sector remained exceptionally strong at the end of 2023.
Additionally, expectations for future growth are among the strongest on record since early 2020. This indicates positive sentiment among businesses, with expectations for next year ranking among the highest since the pandemic.
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