For those accustomed to the litany of worrying news about the economy in Dubai, last week’s Emirates NBD research into the performance of the private sector came as a bit of a surprise. The lender’s Dubai Economy Tracker for July showed that overall conditions are improving at their fastest rate since March last year, with a strong performance from the wholesale and retail sector underpinned by holiday spending over Eid.
There are, of course, some that would question the veracity of economic data provided by the city’s largest bank, 65 percent of which is owned by the Investment Corporation of Dubai (ICD). But it was just a couple of months ago that the same index was reporting a painful decline in overall business activity in the private sector — the first time this had happened since 2010. And not all the news from July was positive; the degree of optimism about the year ahead actually declined month on month in each of the three sub sectors covered by the research. As a foil to the Emirates NBD data, the quarterly Gulf Finance research into the health of the small business sector — which has been fairly damning recently — will be released shortly and should make for interesting reading.
Against this backdrop is the ongoing debate over whether the slowing economy is forcing expatriates to pack their bags and head for the exits. To be fair, this is a discussion that has taken place every year that I can remember, and always between the end of one school year and the beginning of the next.
In the absence of any official statistics, any examination as to whether this year is worse than any other is anecdotal. This week’s issue of Arabian Business attempts to get to the heart of the so-called expat exodus. As ever, it appears that there are two sides to the story. On the one hand, rising costs and job insecurity is certainly taking its toll. Removal companies differ as to the growth in international moves from the UAE (between a 25 percent and a 100 percent rise on last year), while schools are reporting lower — but not calamitously lower — registrations. If you are a Western expat living in a villa with a family to educate, increasing costs and a tendency among employers to pull back on salary packages that have historically included subsidised housing and schooling are making it harder to justify living in the UAE.
However, the news varies sector by sector. If you work in the food, technology, aeronautical or healthcare fields, then recruiters say business is still booming. Those same recruiters are also noticing a demographic shift, with fewer Western expats and more from Asia and the Arab world. And while the UAE is projected to see a still-healthy 3.3 percent growth in GDP this year (above the global average of 3 percent), the news is not universally great back home. Britons may be concerned about Brexit, growth in the Eurozone is grinding to a halt and so on.
There is absolutely no doubt that this year has seen a tougher environment for nearly every private sector company based in Dubai. But it’s also clear that many expats have decided that the grass is not necessarily greener on the other side.
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