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Which industry is booming in the UAE?

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The United Arab Emirates (UAE) has the 4th-largest economy in the Middle East and North Africa (MENA) region, with an estimated GDP of USD 415 billion (as predicted for 2023). The thriving industrial sectors have long been the engine of economic expansion. So, what are the UAE’s leading industries?

Let us examine some of these leading UAE industries that are influencing the country’s economy right now in more detail.

UAE Construction Sector

One of the most productive sectors in the MENA is the building construction sector. This sector has long been an engine of economic expansion in the United Arab Emirates. Over the years, the construction sector has recorded consistent growth. The construction industry in the UAE is projected to grow at an exponential rate of CAGR 4.85 percent to reach 49.40 billion by the year 2028.

Dubai’s mega projects like the “Burj Khalifa”, “Palm Jumeirah”, “Dubai Marina”, and “Abu Dhabi International Airport” are the most ambitious development projects ever driving the construction boom in the UAE. To accommodate the demand among domestic and international investors willing to purchase real estate in this area and set up a business in Dubai, the construction industry includes residential dwelling projects.

UAE Tourism Industry

The UAE is still a top travel destination because of its stunning beaches, opulent hotels and resorts, thrilling amusement parks, and diverse cultural attractions. The tourism industry of the United Arab Emirates achieved new heights in the last year (2023).

In 2023, the tourism sector of Dubai showed signs of rapid expansion. There is strong global interest in Dubai, as a travel and investment hub, as evidenced by approximately two thousand exhibitors and thirty-four thousand people from more than one hundred fifty countries that attended this year’s Arabian Travel Market. In addition, Dubai saw a seventeen percent rise in visitors in the first quarter of 2023.

Today, Dubai is a popular destination for vacation, permanent residence, and business travel. Massive development in the transportation networks and airports have also contributed to the sustained expansion of the tourism industry. Over four hundred airlines serve the industry, linking the United Arab Emirates with numerous international locations. There are still many tour companies in Dubai that provide a variety of trips both inside the United Arab Emirates and abroad.

With an annual rise of AED 27 billion, the strategy seeks to expand tourism’s GDP contribution to AED 450 billion. To accommodate forty million hotel guests, it also aims to draw an extra AED 100 billion in tourism investments.

Transportation and Logistics Sector

Cargo shipping, air freight, port operations, and ground transportation providers come under the purview of the transportation and logistics sector. This sector includes a range of enterprises and has seen rapid expansion in the United Arab Emirates. The factors driving this expansion include increased demand for domestic and international trade and the flow of goods within the region. Despite initial projections to the contrary, the UAE logistics market is expected to grow to a value of over $31 billion by 2026, indicating a significant rise in the industry’s economic significance.

Infrastructural development, strong government backing for international trade, and technological improvement are factors responsible for this industry’s growth. The UAE, particularly Dubai, has become a global maritime hub. It serves as a significant trans-shipment hub between Asia and Europe. The logistics industry of Dubai has been resilient and innovative in the face of worldwide economic uncertainty, thus solidifying the city’s standing as a crucial hub for trade and Business Formation in the UAE.

This rise is due to technological advancements, as logistic service providers depend more on blockchain, AI, IoT, and automated material handling technology to improve their offerings. The rapid growth of e-commerce has accelerated the demand for dependable and punctual delivery, leading to advancements in last-mile delivery and same- or next-day services.

UAE's Financial Services Sector

The financial services industry in the UAE has grown significantly in recent years due to increased investments. The second quarter of last year recorded a growth rate of thirty percent. This trend is expected to expand by 13 percent every year. With over fifty banks, the financial and banking service sector is still getting strong. It brings forth a wide range of services to clients around the globe. Despite the challenges posed by the global economy, financial institutions in the UAE saw a significant rise in net earnings and assets in 2022 and still have a solid prognosis for 2024.

Emirates Insurance is the most crucial participant in the nation’s insurance market. Investment funds are highly popular leading to an increase in investment banks, venture capital, and private equity firms.

The UAE Central Bank is boosting banking digitalization anticipated to propel payments industry income to $18.7 billion by 2031. The sector is also embracing digital transformation. Pluto and Mastercard have forged a noteworthy strategic collaboration, bringing innovative B2B payment solutions to the GCC.

These patterns demonstrate the financial services sector’s vitality, room for expansion, and adoption of digital innovations in the United Arab Emirates.

UAE's Healthcare Sector

The healthcare sector of the UAE is fast evolving accommodating the healthcare needs. Considering the increase in the number of foreigners, expats, and investors in Business setup in Dubai, the healthcare sector offers state-of-the-art medical services and a host of modern treatments that make this sector prominent in maintaining the healthcare system. As decided in the federal budget 2023, AED4.8 billion will be allocated for healthcare and community protection services. It indicates the government’s commitment to healthcare reform. The number of private hospital beds in various emirates has increased due to this investment.

Over the years, the emirate has shifted its focus on imbibing the latest technologies in the medical sector. Increased investments are a result of it. AI-driven diagnostics, Telemedicine, and robotic surgery are recent technologies influencing the medical services industry. The continuous efforts of the government are apparent in making the public health system accessible and up-to-date.

The government is committed to tackling severe health issues like diabetes and respiratory disorders. Hence, more investments are likely. These initiatives aim to make healthcare more accessible and affordable, highlighting the government’s dedication to offering excellent healthcare services and sustaining its status as a pioneer in the world’s healthcare industry.

Conclusion: UAE's Top Industries

Within MENA, most thriving and active industries exist in the United Arab Emirates. Each of these industries is vital to the nation’s economy. When together, they produce a vibrant business climate that draws global investment. Hence, in the Middle East, the UAE is one of the most sought-after business destinations, providing flexible business concepts and attractive avenues for investment, whether to start a business venture or increase your footprint.

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