Tuesday, 26 May 2009

UAE job losses set to continue amid recovery

From ArabianBusiness.com 25 May '09.
Where's this economic recovery happening? Its not happening in my little corner of Dubai where in the last 24 hours two more friends have been made redundant and will leaving the country as there's no work in construction for them. Heard all the 'green shoots' stories blah, blah, blah? You just have to look around you in the UAE to see signs that things here aren't good and they aren't going to improve in the foreseeable future. Raise this question and the response seems to be 'if you don't like it you can leave' and there are plenty of people doing just that or "It can't be that bad because last weekend Dubai Mall /BurJuman/everywhere expect Bin Hendi Luxury Avenue was packed" but how many of those people in the malls were actually buying and how many were there just to escape the heat? If even half the rumoured number of people leave the UAE at the end of the school year (June) and don't return in September, the loss of population will have a noticeable effect on the local economy.

Rents continue to fall. Unfortunately our current landlord lives in a parallel universe where rents haven't dropped, he refuses to lower the rent so we're moving out - the people in the villa next door moved out three weeks ago for the same reason and are living just round the corner at a considerably cheaper rent. We recently looked at a villa in Umm Suqeim 3 that 5 months ago was rented for AED300,000 but now the landlord's asking AED175,000 and still hasn't had a bite in all that time. At this time last year, renting a house in Dubai was a hard task, rents were astronomical and a lot of compounds had waiting lists; now, we drive around the streets and count the "To Let" signs which seem to be growing in number weekly. In the Garhoud area alone, we've looked at maybe 15+ houses, all in the AED170,000-190,000 price range. Last year every one of them would have been in the AED220,000-250,000 range.
Job losses will continue to take place in the UAE even as economic recovery takes hold, a leading economist in the region warned on Monday.

Further redundancies would happen in the Gulf state over the coming months because the jobs market lagged behind the real economy, said Marios Maratheftis, chief economist at Standard Chartered in the Middle East.

“Inevitably job losses are taking place and, in my opinion, they will continue to take place even as the economy is recovering because the jobs market is a lagging indicator of the economic cycle,” said Maratheftis during MegaTrends, Essential Strategic Insights 2009 in Abu Dhabi.

Despite the economic crisis hitting the UAE in September, it wasn’t until January that staff numbers were cut by many firms, especially those in the real estate, construction and banking sectors, he said.But he said most job cuts had already taken place.

As many as one in four expatriate employees in the UAE have either lost their job or fear they will over the next 12 months, according to a survey released in March by market research company Real Opinions.

No comments:

Post a Comment