Dubai is About Much More Than Just Oil
It’s fair to say that the Middle East is recognized as a global center for petroleum production, and the oil and gas industry in the UAE is certainly a prominent feature. Even so, the UAE has come to be known for much more than just oil, and even more so for Dubai in particular. Business activity in Dubai’s non-oil private sector continues to expand and improve at a fast clip. As of April 2022, non-oil business enterprises were growing at the second-fastest rate since mid-2019, in fact. According to the S&P Global Purchasing Managers’ Index, Dubai’s non-oil private sector has been in growth mode for 17 consecutive months.
It’s fair to say that some of this economic growth in Dubai is due to two key factors:
• COVID-19 social restrictions have been relaxed
• Dubai hosted the World Expo 2020 from October 2021 through March 2022, which gave a boost to the local travel, tourism, and retail sectors in particular.
But the fact that business growth continued at a fast rate in April – after the conclusion of Expo 2020 in March – is an even more telling sign about the current health of Dubai’s non-oil economy.
Some Key Business Sectors That Are Helping to Fuel Dubai’s Economic Growth
Travel and tourism
We mentioned that the tourism sector has helped to lead the way in Dubai’s post-pandemic economic rebound. International visitor numbers during the fourth quarter of 2021 climbed all the way to 74 percent of pre-pandemic levels. In fact, Dubai was one of the first major global tourist destinations to open its borders following the height of the pandemic while still following strict health and safety guidelines.
Hotels and hospitality
Sheikh Hamdan bin Mohammed, Crown Prince of Dubai, reported in May that Dubai received about 4 million visitors in the first quarter of 2022 alone – a surge of 214 percent on the year. Dubai was also ranked #1 in the world in terms of hotel occupancy rates during the first quarter, as well. During this time period, local hospitality establishments recorded a rate increase of 82 percent.
Retail and wholesale
Despite ongoing pricing challenges thanks to rising costs of both raw materials and fuel globally, both the retail and wholesale sectors continue to do well in Dubai. Suppliers have been able to deliver inputs more quickly through the first quarter of 2022, and this has served to benefit both retail and wholesale enterprises.
Another key player in Dubai’s economic resurgence is the real estate sector. The property market in Dubai has recorded its strongest start to a year ever, seeing more than 12,000 sales transactions in the first quarter of 2022 alone. Residential real estate prices have risen nearly 60 percent year-to-date, driven largely by growing interest from international investors. Construction firms have noted a modest increase in new projects in 2022, as well.
Dubai is Poised to Lead the Next Economic Boom with FDI Capital
Based on recent data from the Dubai FDI Monitor, industry and financial experts are pointing to the fact that Dubai is likely heading for another economic boom. Dubai currently ranks first in the Arab world and third globally in FDI (foreign direct investment) attraction, and this positive trend is expected to continue. Crown Prince Sheikh Hamdan bin Mohammed stated that Dubai is now among the world’s most attractive FDI locations, and that global investors are placing their confidence in Dubai’s business ecosystem.
The numbers back up the Crown Prince’s testimony. Dubai attracted some $4.3 billion of FDI capital inflow over the first 9 months of 2021. That’s even more impressive once you take into account the fact that the rest of the world was still trying to play catch-up in recovering from the pandemic-induced economic slowdown. Dubai’s capital inflow has come from prominent locations, including the UK, France, the US, Saudi Arabia, India, and Germany.
And as Rakesh Menon, former global senior VP of JP Morgan, points out; you definitely shouldn’t count out Dubai in terms of its continued economic growth potential, either. Menon says we’d be remiss if we didn’t “factor in Dubai’s strategic location, which is helping it to control 70 to 75 percent of the global GDP. So, I can confidently say Dubai is now riding the next wave of economic boom, which has just started.”
The Best Time to Start a Business in Dubai is Right Now – And MSZ Consultancy is Here to Help!
Dubai and the UAE have established themselves as global leaders for hosting business startups and foreign direct investments for many years; the future is still bright for business endeavors in Dubai. This premier emirate boasts a world-class infrastructure, a growing economy, and government officials who have gone to great lengths to enact some incredibly business-friendly policies, including for local business endeavors that are 100% foreign-owned. Ready to get your own business started in Dubai or elsewhere in the UAE? If you are, then look no further than MSZ Consultancy for trusted advice and counsel!
We’re locally-based right here in Dubai, and we maintain strong relationships with all of the relevant government officials and authorities. We’ve gained an intimate mastery of pretty much everything there is to know about the business of doing business in Dubai and the UAE, and we know exactly what it takes to help you get your business started and poised for success in Dubai and the UAE! Whether you need a UAE trade license, visa paperwork, or just want some sage advice about navigating the business landscape in the UAE Mainland, UAE Free Zones, or UAE Offshore, the MSZ business setup consultants are here to serve.
Reach out now to book your free consultation! You can give us a call at +971 52 544 1248, or you can also get the conversation started by shooting us an email at firstname.lastname@example.org. There’s no need to wait; let us help you start making your UAE business dreams a reality today!