Boston, MA -- (SBWIRE) -- 02/14/2013 -- Despite ongoing turmoil in global markets and renewed concerns surrounding the strength of the US, eurozone and Chinese economies, the outlook for the UAE over the coming quarters remains relatively firm. Following real GDP growth of 4.2% in 2011, we are estimating that the economy expanded by a more moderate 3.3% in 2012. In 2013 we forecast that growth will pick up again to 4.4%. However, our freight transport growth forecasts exceed this rate of expansion. This is down to considerable investment in expanding facilities and the country's growing importance as a transhipment hub for maritime and air freight volumes, taking advantage of its position at the meeting point of three continents.

Headline Industry Data

- 2013 Jebel Ali and Port Rashid total tonnage throughput growth forecast at 6.1% and to average 4.6% to 2017.
- 2013 air freight tonnes through Dubai airport forecast to grow by 6.3% and to average 5.9% to 2017.
- The UAE's total trade real growth in 2013 forecast to be 7.6% and to average 5.7% over the medium term to 2017.

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Key Industry Trends

Emirates SkyCargo Increases Australian Exposure

BMI notes that Middle Eastern air carriers are becoming increasingly interested in the opportunities presented by the Australian air freight sector, and are increasing their exposure to this market. Emirates SkyCargo, the air freight wing of Dubai flag carrier Emirates, has announced plans to launch four weekly flights to the southern city of Adelaide from November 1, building on its existing Australia-Dubai connections.

Al Maktoum Continues Strong Growth

BMI believes that the new Dubai airport of Al-Maktoum International will continue to enjoy the strong levels of growth that it has posted in H112 as it enjoys the base effects of having opened in 2012. Nevertheless, we note that the growth achieved in such a short space of time is impressive, and is indicative of the great leaps forward being made in terms of air freight in the Middle East, and particularly Gulf, region.

New Terminal For Jebel Ali

BMI has revised up its medium-term box throughput forecast for the Dubai port of Jebel Ali on the back of the recent signing of a contract for the construction of its third terminal, scheduled to open in 2014. We note that the third terminal will help ensure that the DP World-operated facility continues to grow its transhipment trade in the Gulf in the face of rising regional competition.

Key Risks To Outlook

Key risks to our outlook for the UAE's freight 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 significant disturbance will take place in the UAE.

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