Norconsult Telematics

Jobs, News and Information for Jobseekers in the Gulf

Upload Your CV

Go Back

Continued Infrastructure Investment in the GCC as Retail Sector Set to Surpass 220 Billion by 2015 and Oman to Experience 25 Percent Rise in Non-Oil Exports

Middle East : 21 June 2013

GCC Infrastructure Investments Remain Strong and Steady

In a bid to diversify the regional and national economies and boost levels of non-oil GDP, the GCC nations continue investing in infrastructure, according to a recent QNB report.

Growth in the MENA region is forecasted at 3.5 to 4 percent for 2013 and 4.5 to 5 percent next year, although global economic headwinds and uncertainty within the political climate of several GCC nations may affect those plans.

Robust demand in the private sector and rising levels of public investment continue to trigger expansion in the GCC non-oil sector, while weaker gas and oil prices and flattened production levels are expected to stifle growth in the region’s hydrocarbon sector, according to the QNB report.

Over the next two years nations in the MENA region are forecasted to experienced stronger performance in the economy, supported by better conditions in the global economy, rising levels of investment and recovering domestic demand. The QNB report noted that significant risks remain and may affect growth over this period.

Lower inflation levels and enhanced fiscal positions across oil importing nations are expected to come along with economic growth in MENA.

Imbalances within the current accounts across the region should be driven down by declining oil and gas prices.

QNB reports that growth in the MENA region provides positive investment opportunities for many global investors.

Earlier forecasts by the IMF noted that oil exporters such as Saudi Arabia and Qatar led with 6 percent overall growth in the real GDP, while lower levels of growth in oil importing nations were reported (1.9 percent).

Members of the GCC reported lower levels of inflation at 2.4 percent, compared to the balance of the MENA region at 8.9 percent.

Rising oil and gas prices have also resulted in massive surpluses in current account balances of the GCC nations.

Retail Sector in GCC Set to Surpass 220 Billion in 2015

With an annual growth rate of 7.9 percent between 2012 and 2015, the retail sector of the GCC should hit $221 billion, supported mainly by food and beverages.

Last year nearly 50 percent of the GCC market consisted of tobacco and food and beverages, and a recent report from Kuwait Financial Centre forecasts a sustained trend. The GCC’s retail sector continues to record the fastest rates of growth in the region.

Although economic growth slowed in the GCC as a result of the global financial crisis, the region’s retail sector continued to rise and post healthy growth rates, according to the Kuwait Financial Centre report. Retail is growing in importance for the GCC region, as evidenced by Dubai’s place in international retail. The city shares the top position with London, England. Retailers from the United States and Europe considering expansion are looking to Riyadh, Jeddah and Kuwait City as possibilities.

A youthful demographic profile and high levels of per-capita income in the GCC give rise to the demand for luxury items and electronics, while the employed expat population continue to drive demand for consumer goods.

Consumer spending across the food retail sector in the GCC should hit $106bn over the coming five-year period, accord to global management consultants AT Kearney. Food continues to dominate the GCC’s retail sector, accounting for $83bn of the overall $300bn of consumer expenditures in 2012.

Alpen Capital recently forecasted that the retail industry in the GCC would surpass the $270bn level by 2016.

A 7.7 percent CAGR is forecasted for the GCC’s retail sector from 2011 to 2016. Sales of food is expected to report an 8.8 percent CAGR over this five-year period, with non-food sales in the retail sector growing by 6.6 percent annually.

The growth of tourism in the area continues to drive retail. The GCC welcomed 37.3 million international tourists in 2011, and that figure is expected to hit 44.4 million by 2016.

Non Oil Exports Up by 25 Percent in Oman

Oman’s non-oil exports have risen by 25 percent in the past few months and are expected to report further growth, according to data from the Public Establishment for Industrial Estates (or PEIE). The increase is credited to efforts by the relevant authorities based on a statement by PEIE director Hamood Abdullah al Balushi.

Around 80 percent of the products made in Oman are consumed by the domestic market. Exports account for 20 percent of total products, increasing by 14 million from November 2012 figures to reach over RO 1,860mn in December.

This growth is expected to continue, driven by government efforts and the focus of several organizations, including the Oman Chamber of Commerce & Industry, PAIPED and PEIE.

Major products in the food sector include processed and canned foods, as well as beverages and edible oils produced in the region. Exports cover a broad spectrum, including animal and vegetable products, prepared edible oils, animal and vegetable waxes, fats and oils, live animals, tobacco and substitutes, prepared foodstuff and vinegar.

Other GCC nations continue to provide most of the export activity, although China remains a major export partner with Oman, accounting for 30 percent of the total. South Korea and Japan account for 11 percent and 10.5 percent, respectively. Other partners include America, India and Thailand.

Exhibitions help businesses to explore foreign markets, as does participation in foreign events around the globe. The PEIE director noted that his organization continues to search for foreign customers and explore potential foreign partnerships to advance Omani businesses worldwide. Oman participated in a Saudi Arabian exhibition and continues to expand participation in the Doha Expo.

Al Balushi also noted that PEIE, PAIPED and OCCI remain in regular contact and work together on projects with the aim to drive foreign demand for Omani products and invite foreign investors into the nation.

Paul Holdsworth, Staff Writer, Gulf Jobs Market News
Bookmark or share this page:

  • E-mail this story to a friend!
  • LinkedIn
  • StumbleUpon
  • Technorati
  • TwitThis