2012-08-31 13:55:50 - New Transportation market report from Business Monitor International: "United Arab Emirates Shipping Report Q4 2012"
In 2012 we project that the UAE will enjoy real GDP growth of 3.5%, a slight improvement on our estimate for 2011, 3.3%. Credit conditions remain weak, though the improvement in consumer sentiment will likely lead to an uptick in private consumption. Growth over the medium term will remain steady, with the economy set to expand by 3.2% in 2013 before accelerating slightly to between 4.4% and 4.7% from 2014 to 2016. The ports sector in the UAE is set to perform particularly well, and is pressing ahead with new developments and expansions.
As a result, the growth outlook for the UAE's ports in 2012 is upbeat. The facilities also benefit from their role as transhipment hubs. Strong growth is forecast
by BMI at all of the emirates' major ports despite the headwinds facing the global economy; however, we project that this growth rate will slow over our forecast period to 2016.
Full Report Details at
- www.fastmr.com/prod/451196_united_arab_emirates_shipping_report_ ..
Headline Industry Data
* 2012 Jebel Ali and Port Rashid total tonnage throughput growth forecast at 6.8%, and to average 5.3% to 2016.
* Sharjah container throughput (KCT and SCT) is forecast to grow by 6.7% in 2012, averaging 5.3% over the medium term.
* Jebel Ali container throughput is forecast to grow by 11.9% in 2012. Through to 2016, we expect growth to average 8.0%.
* Total trade real growth is forecast at 8.5% in 2012 and to average 6.5% through to 2016.
Key Industry Trends
Khalifa Port Above Regional Competition
BMI believes that the opening of the Khalifa Port in Abu Dhabi, planned for the last quarter of 2012, will further boost the UAE's ports sector, already the outperformer of the region. The question mark over the need for the raft of facilities being developed in the Gulf region remains, though it should be noted that Khalifa Port has stated that it is not competing for transhipment business, but rather to become a destination port, fully supported by the presence alongside of the Khalifa Industrial Zone Abu Dhabi (KIZAD).
Jebel Ali Signs Up For Rail Freight
The development of the UAE's planned railway network is rolling forward, with the project's developer and operator Etihad Rail turning its attention to the country's container freight needs. A memorandum of understanding (MoU) has been signed between the railway company and DP World, the operator of the country's largest box port, Jebel Ali.
Emerging Markets Buoy DP World Results
BMI believes that DP World's latest results are indicative of the global macroeconomic environment, with the emerging world outperforming the company's assets in developed markets. The terminal operator's focus on emerging markets is a strategy that has served it well so far, and will be crucial for future performance given our outlook for 2012.
Key risks to our outlook for the UAE's shipping sector come from the continued sovereign debt crisis in the eurozone, a major trade partner, and the continued political unrest in the Middle East, though we do not believe that significant disturbance will take place in the UAE.
Likewise, were Iran to follow through its threats to close the Strait of Hormuz to global shipping, then there would be considerable downside risk to those UAE ports on the Gulf, and upside risk to the Sharjar terminal of Khorfakkan, which lies outside the strait on the Arabian Sea. BMI's core view is that this will not happen, however.
Equally, as with any economy largely reliant on the export of crude oil, we note that risks to our outlook are ever present. Any significant change to the oil price, whether that be caused by a supply shock, a double-dip global recession, or a release of strategic reserves, would bring risk to our macroeconomic forecasts for the country.
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