Abu Dhabi booms as business confidence rises
The general index of confidence in the business climate in Abu Dhabi improved two points year-on-year to 61 points, in the first quarter of the year.
However, it dipped two points on quarter-on-quarter basis, says a joint study by the Studies Division of the Department of Economic Development and the Statistics Centre-Abu Dhabi. Large industrial, commercial, construction and services firms were optimistic on the general index of confidence and current situation index. However, small, medium and large establishments were neutral, due to the economic scenario emerged after the plunge in oil prices and slower economic growth in the Western economies and Greek crisis.
The study expected that the good financial conditions in Abu Dhabi, as reflected in the credit quality classification (+AA) by Standard & Poor's Agency, boosted confidence in the economy, as credit rating agency, Standard & Poor's excluded the impact of the fluctuations in oil prices on development projects.
Abu Dhabi Business Center has reduced the average number of procedures for the issuance of commercial licenses and the number of days necessary to start a business by half and the average cost of issuing commercial licenses by 30 per cent. Abu Dhabi is working on completing the common system for the issuance of various commercial licenses in Abu Dhabi by next year. In its efforts to boost domestic demand, Abu Dhabi is spending Dh330 billion on infrastructure projects during the five-year 2013-2017 period. This policy has also helped improved business sentiments. Abu Dhabi issued 2,452 new commercial licenses in the January-March period as it remained a preferred destination for business.
The firms involved in various businesses showed optimism about their internal situation and the economic situation in general in the quarter. The results show an improvement in the performance of the trade sector, reflected by the increase in the total value of non-oil merchandise trade in Abu Dhabi during the last quarter of 2014 by 15.8 per cent year-onyear to Dh39.4 billion. The value of non-oil exports increased 12.6 per cent to reach Dh4.7 billion.
The industrial sector's performance was affected by the fall of prices, as the producer prices index decreased by 8.6 per cent in the fourth quarter of 2014 compared to the third quarter of the same year. This came despite the better performance of the manufacturing industries, as the Industrial Production Index increased by 2.2 per cent, while in the service sectors, the tourism sector has significantly improved, as the number of guests and room occupancy levels rose in addition to the hotels revenues during the month of January 2015 compared to the same month of 2014, according to the report of Abu Dhabi Tourism and Culture Authority.