DED releases eight key indicators in 2011

Abu Dhabi, Feb 12, 2012 (WAM) - The Department of Economic Development (DED) in Abu Dhabi, has released eight key indicators in 2011: the Consumer Confidence in Economic Performance Index, the National Family Conditions Observatory, the Business Cycle Index, the Confidence in Business Climate Index, the Labour Market Demand Trends Index, the industrial Index, the Financial Sector Index and the Foreign Trade and Exports Index. Most of these development indicators, revealed optimism of individuals in various categories towards the improvement of economic conditions in the Emirate of Abu Dhabi in 2012, despite the regional and global events and economic developments that took place in 2011, and resulted in slowing down the economic recovery, which the world economy began to experience at the end of 2010; after being affected by the American debt crisis, the European sovereign debt dilemma, and the sluggish global financial markets. The results of the development indicators in the Emirate of Abu Dhabi were constructed by the Studies Directorate, to reflect regional and global conditions, and underline the strength of Abu Dhabi's economy in facing challenges and global threats, despite fears expressed by international institutions, such as the World Bank and the IMF of a new wave of economic recession. However, these fears lowered the general level of optimism among individuals, institutions and the international economy in general. The Consumer Confidence in the Economic Performance Index aims at measuring the levels of optimism or pessimism of consumers towards the current economic conditions in the Emirate of Abu Dhabi, and anticipated economic trends in the near future, all of which will affect consumers spending and savings decisions. The results of the general index of consumer confidence in the economy of the Emirate of Abu Dhabi, revealed that the index remained above the level of neutrality, and took a gradual optimistic path at the beginning of last October and continued forth until the end of the year, reflecting the continuous confidence of consumers and individuals in the performance of the economy. This path indicated that confidence in the performance of economy will continue although during 2012, especially that sub-index of confidence in future economic conditions, during the month of December, registered 140 points, reaching a level higher than the general index. By the end of the fourth quarter of 2011, optimism increased among individuals and consumers in the Emirate of Abu Dhabi, as the general index of consumers' confidence in economic performance, started to rise in September 2011 to register 122 points at the end of December 2011. However, the general index registered low levels of optimism during the first months of last year, due to the uncertainty, and lack of clear vision about regional and global economic conditions. Optimism towards future conditions in the emirate, and confidence in policies, remained at high levels, registering (140) and (114) points respectively during the year 2011. This rise in the level of optimism, was due to a combination of factors; most importantly, the high awareness of individuals and consumers of the great efforts made by the Government of Abu Dhabi, to provide a decent, safe and secured life for all citizens and residents; and the keenness of the Government to take necessary measures to spur the performance of the emirate's economy in general, and create new job opportunities for citizens in all disciplines, especially after the announcement of the Government of Abu Dhabi in late 2011 of (6000) new jobs for citizens, whose intake for these jobs started at the end of October and the beginning of November 2011. All this was augmented by the great efforts made by the Government of the Emirate of Abu Dhabi to stabilise food prices, and secure food commodities for citizens at subsidised prices for products such as rice, flour and water; and the government's strive to develop the agricultural sector, increase agriculture contribution to GDP, support the role of agriculture to achieve food security of local production, stabilise prices and exempt most agricultural imports from customs duties. The mechanism of receiving consumers' private or price-related complaints was highly improved. The Abu Dhabi Food Security Centre was formed under the responsibility "Abu Dhabi Food Control Authority", to set appropriate policies to ensure food security, and develop policies and recommendations to assess and determine the economic, social and environmental optimal sustainable level of agricultural production and fish produce, of local and foreign origin. In addition, the Abu Dhabi Food Security Centre duties include developing policies and programs to encourage appropriate sustainable and efficient technologies and systems in the fields of agriculture and animal production. The Food Security Centre, supports scientific research, and invites cooperation with research organisations within and outside the State in order to enhance food security. The rise in world food prices, led to sharp hikes in food prices in the Emirate of Abu Dhabi in 2011 compared to 2010. In this regard, the report of the Central Bureau of Statistics issued on December 6, 2011, referred to the rise in the Consumer Price Index by 1.9% on average during the period (January-November 2011) compared to the same period in 2010. The report indicated that the "Food and non-alcoholic beverages" group, was the group that contributed most to the rise in consumer prices, during the period. The second highest contribution to the rise in consumer prices during the period (January-November 2011) compared to the same period in 2010 was, came from the "Housing, water, electricity, gas and other fuels," group, which contributed by 34.6% of the overall rise in prices; as its prices increased by 1.8%. Meanwhile, while the consumer price index in November 2011 dropped by 1.7% compared to October 2011. According to the FAO Food Price Index, the general price index increased in 2011 by 23.6% compared to 2010. This increase reflected the hike in international prices of all goods covered by the index. Prices of grain, oil and sugar, recorded the highest increase by (36.3%) and (31.1%) and (23.4%), respectively, while prices of meat and milk products were less high, reaching (15.6%) and (10.9%), respectively. The Business Cycle Index information monitors the economy activity and the changes that determine the path and trends in the economy of the emirate. These indicators and findings can be used to avoid macroeconomic shocks and unfavourable repercussions, and help curb and mitigate economic pressures and ensure close and timely surveillance of movement and trends of change in economy. These also help in the development of economic policies and programs, and in taking appropriate actions, which contribute to the stability of the economy and enhance the economic environment for investors and businessmen in the emirate. The results of the Business Cycle Index for the Emirate of Abu Dhabi revealed the improvement in the performance of the economy, especially in the third quarter of 2011, compared to the beginning of the year, which led to the restoration of sense of optimism by businessmen at the beginning of October and onward, until the end of the year. The value of the index rose from 99.8 points during the second quarter to 102.5 points during the third quarter and to 104.12 points at the end of the year. Despite the improvement in the economic performance in the emirate, and the restoration of businessmen optimism once more in the third quarter of 2011, the general index of confidence in the business climate at the end of 2011, recorded a slight increase by two points on the 100 points-scale, compared to 2010. The results of opinion polls on optimism towards the future conditions of the economy of the emirate indicated a sense of optimism among businessmen about future conditions, as the value of the sub-index of business confidence towards future conditions recorded 56 points on the 100 points scale. An improvement was witnessed in 2011, in some of the sub-indices which constitute the business cycle general index, as the sub-indicator concerning issued licenses, registered an increase of 15.5% in the rate of annual change in 2011, compared to 2010. The Confidence in Business Climate Index, in the Emirate of Abu Dhabi measures the confidence of economic establishments (industrial - commercial - services - construction etc ) in the current performance of the economy of Abu Dhabi, in addition to measuring the level of confidence in the expected future performance. The index depends on the results of opinion polls for representative samples of companies and businesses. The General Index of Confidence in Business Climate, revealed that optimism towards the performance of the economy of the Emirate of Abu Dhabi continued among business establishments, as the annual average of the index recorded 53 points, exceeding the level of neutrality by (3) points, while it registered 55 points in 2010. According to the index, the industrial and trading establishments were the most optimistic. The General Index of Confidence in Business Climate revealed that the Emirate of Abu Dhabi focuses mostly on investment in infrastructure, including bridges, tunnels and electricity, in the short and medium terms, which will help the construction activity in spurring the building and construction sector in the coming period. The Labour Market Demand Index aims at identifying the patterns of demand in labour market in the Emirate of Abu Dhabi, through the analysis of required jobs in accordance with the various educational levels, disciplines, professions, economic sectors, geographic distribution, gender, age groups, etc These measurements are facilitated by opinion polls questionnaires, tailored for a sample representative of the targeted statistical population in the Emirate of Abu Dhabi, which is the labour market. Opinion polls enable monitoring trends of employment in private and public sectors, and drawing results showing the status of demand in the labour market, in order to develop policies to strike a balance between supply and demand, and enable the labour market to perform in the best way. At the level of the geographical regions, the index showed that demand for labour demand increased to 89% during the period (January-March 2011), compared to 85% for the same period in 2010. Demand for jobs in the city of Abu Dhabi during the same period, with regard to the total required jobs in the emirate reached 89%, while the percentage in Al Ain reached 9%, and in the western region the rate stood at 6%. The private sector is considered as most attractive for foreign workers, as a result of the diversity of jobs; whereas the private sector accounts for the majority of demand for labour in the Emirate of Abu Dhabi by 98.9%, followed by the government sector with 8.4% share and the joint sector with 1.1%. The city of Abu Dhabi and its suburbs are the areas with the highest demand for labour in the emirate compared to Al Ain and the Western Region. This is due to the concentration of economic activities in Abu Dhabi compared to the other regions. The private sector acquired the highest rate of demand for labour in comparison to the government and the joint sector; whereas construction activity accounted for the lion's share of total demand for labour during the current period (January-March 2011.) The demand for labour in the activity of transport, storage and communications in the Emirate of Abu Dhabi, experienced a remarkable increase compared to last year, in view of the large expansion which streamed the various fields of activity. Respondents indicated that the reasons behind preference of national labour include the ability of citizens to communicate and deal well with all nationalities, and cultural and social considerations, which accounted for 19% of the total number of respondents. One of the important reasons for preference of national labour, is the (qualifications and work experience), which accounted for 10 during this year. The Industrial Index is one of the most important indicators of confidence, as it enables measuring the degree of confidence of the industrial establishments in the current performance of the economy; and in expected future performance. This is facilitated by conducting surveys or opinion polls to tap the views of businessmen in this area, as they are more capable of evaluating and assessing, based on the prosperity or contraction of their business, and the impact of actual performance on their future plans. The Abu Dhabi Economic Vision (2030) laid great emphasis on the industrial sector, as it will stand as one of the main pillars of growth in the economy of Abu Dhabi in the coming years; especially in view of the surge towards the diversification of the productive base, and the shift from an oil dependent to a knowledge-based economy in which non-oil sectors contribute by not less than 60% of GDP by 2030. Due to the importance of the industrial sector, and in order to overcome the obstacles which hinder the industrial sector in the Emirate of Abu Dhabi, affect the sector's competitiveness and negatively impact its contribution to (GDP), it was essential to periodically and annually tap opinions and views of the industrialists on the economic performance of their establishments. The views and opinions were processed to constitute an index which measures the degree of optimism or pessimism among industrialists in relation to the performance of their facilities. This enables monitoring of the most important obstacles facing the industry, and proposals on how to tackle or reduce obstacles. A sense of optimism prevailed among the industrialists, as the results of the opinion polls survey, for operating industrial enterprises detected cautious optimism towards improvement of future conditions, due to the current unfavourable international economic conditions and the state of anticipation and uncertainty over the global economy's ability to overcome the lingering circumstances and repercussions; and the time needed for positive responses to policies, procedures and the expected corrective measures. Most of the constraints faced by the industrial facilities include demand and supply-related issues. Around 80% of the establishments reported that they faced demand and supply-related obstacles, while 10% said that they were confronted by supply- related constraints only; whereas 3% of the establishments indicated that their obstacles were only demand-related. 7% denoted that they did not face obstacles in their activities. The index showed that non-utilised production capacity in factories; vary according to the type of activity. However production capacity reached its highest in the activities of electricity, gas and water, garments and leather industries; whereas the lowest utilisation of production capacity was detected in recycling industries. The average rate of utilisation of production capacity in the factories Abu Dhabi stands at 74%. The large and small facilities, showed remarkable degree of optimism towards economic conditions in the emirate, as large enterprises are able to withstand transient market pressure, due to its financial, technical and marketing capabilities; whereas small enterprises, unlike medium establishments, usually have to take more quick decisions and corrective measures and respond rapidly to changes in the markets. However, medium-sized industries expressed caution towards the current economic conditions in general. The Financial Sector Index is a composite index which measures the performance of the financial sector in the Emirate of Abu Dhabi, with some precision, and prediction with regards to the future performance of the financial sector in the short term. With aim to predict crises that might be face financial sector and the economy of the Emirate of Abu Dhabi. The Financial Performance Index, in the Emirate of Abu Dhabi consists of the twelve variable, variable or sub-indices, which includes both the real economy and the financial system. The results of the general index of the financial sector, showed marked improvement during the first half of 2011, compared to previous periods, as the index scored 103 points in the second quarter of 2011, up slightly, compared to the first quarter of the year, when it reached 102.6 points, maintaining the continuous improvement which the general index had been witnessing since the second quarter of 2010. The improvement which the index achieved during the first half of 2011 was due to the enhanced performance of a number of its constituting sub-indices. The most important of these indicators, was the fall in inflation rate, the drop in proportion of loans to deposits, the decrease in ratio of money supply to foreign reserves, the drop off in the ratio of the volume of domestic credit to GDP, and the decrease in the average rate of return on the three-month bank deposits. In addition to the improvement in the performance of a number of other sub-indices; and their positive impact on the general index, which witnessed a significant increase; such as the rise in oil prices and the capital adequacy ratio. This marked improvement in the financial sector index, is a testament to the robustness of the UAE economy, and the economy of Abu Dhabi and its ability to overcome challenges and crises; thanks to the sagacious leadership of His Highness Sheikh Khalifa bin Zayed Al Nahyan and his wisdom in dealing with the repercussions of previous the global financial crisis. The instructions of the UAE President to take several simultaneous actions, helped in overcoming the ramifications of the crisis in a short time. The international institutions paid tribute to the stability of the United Arab Emirates which topped the MENA in the Financial Development Index of the World Economic Forum in 2010. At the level of foreign trade, the results of the Export Index showed that the volume of trade balance deficit continued on the rise, for non-oil commodities, as a result of the impact of regional and global economic conditions on the trade of Abu Dhabi and especially its exports. The non-oil commodity imports are considered as the main contributor to the non-oil foreign trade movement in the Emirate of Abu Dhabi, as it accounted for 78.3% of the total non-oil commodity foreign trade in the emirate during the period (January-June 2011). Whereas the share of non-oil commodity exports and non-oil commodity re-exports accounted for 12.3% and 9.4%, respectively, of the total foreign trade of non-oil commodities during the period (January-June 2011). The results of the Observatory showed that the average household expenditure on education amounted to Dh33,198 per year, while average spending on mobile phones amounted to Dh3521 in the three months preceding the survey. The average expenditure on land line phones and internet reached Dh1209 during the last three months. The results of the Observatory also indicated that (64%) of respondents commonly change their mobile phones on an ongoing basis; and that (63%) of them purchase their cars through bank financing. To reveal the extent of how living conditions of national families were affected by all these developments, the results of opinion polls during 2011, showed the increase in the awareness of national family, of changes in the prices of all types of food, durable goods, ornamental goods and all kinds of garments and clothes. Results and findings showed no change in the consumption pattern of most national families, regarding consumption of goods that experienced hikes in prices, during the period of the survey. These results coincided with the results of the "Consumer Confidence in Economic Performance Index"; and the results of the "Consumer Prices Index", especially in relation to the (food and non-alcoholic beverages) group, during 2011, as indicated by the report issued by the Statistics Centre- Abu Dhabi. In response to a question on the consumption behaviour of national families, in the face of rising food prices, the results indicated that there was no change in the pattern of consumption, as most families consumed the same quantity, or more quantities of the same item which experienced a hike in its price. However, the largest percentage of families, reported that their consumption of food commodities had risen, despite the increase in their prices, especially meat products, fish, vegetables, fruits and poultry. - Emirates News Agency, WAM