Middle East business services continues downward trend
The Middle East’s business services sector is showing no signs of improvement, as figures from 2011 onwards illustrate. Cara Lyttle reports.
Greenfield investment monitor www.fdimarkets.com shows that between January 2011 and October 2016, total investment in the business services sector across the Middle East has continued to decline.
The number of business services projects into the region has decreased significantly, from 193 in 2011 to 135 in 2013, and 84 in 2015, the lowest figure recorded since 2006. The number of investing companies and jobs created also dropped between 2011 and 2015.
Data shows that in 2011, 163 individual companies invested in business services projects in the Middle East with 6191 new jobs created, which declined to 116 companies and 4207 new jobs in 2013.
UAE strongest
In 2015 the number of investing companies in the Middle East had fallen to 76, with 1679 new jobs created, marking a decrease of 15.55% and 34.34% respectively from the previous year. Between 2011 and 2016, the United Arab Emirates attracted the lion’s share of investment in the region with 751 FDI announcements, followed by Qatar with 163 and Saudi Arabia with 146 projects.
The primary investing countries in the Middle East between 2011 and 2016 were the UK, the US, France and the UAE itself. The downward trend recorded by www.fdimarkets.com indicates that the slump the Middle East is experiencing in business services investments is set to continue for the reminder of 2016 with data recorded for Q1-Q3 showing the region attracted 49 investments, a drop of 19.67% from the same time period in 2015.
Despite the decline in investments during 2016, the Middle East has experienced an increase in both capex and job creation, primarily due to a $1.2bn investment by Valoriza Agua, a subsidiary of Spain-based Sacyr, which will establish a new seawater desalination plant in Sohar, Oman by 2018.
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