Up until August the outlook for the materials handling sector looked promising. Though the worst financial crisis since the great depression had dampened global sentiment, the world market was showing some encouraging signs of recovery. In March this year, Lorie King, associate editor for the website Modern Materials Handling, had forecast in her article: 2011 Industry Outlook: Optimism Shines, that the world market would, “more bloom than gloom” in 2011.
And she had justifiable reason to believe this given the positive figures coming out of the world’s largest economy which revealed that; in the first quarter of 2010, U.S. Gross Domestic Product (GDP) grew 3.7 per cent; in the second quarter it grew 1.7 per cent, and in the third it was up 2.6 per cent.
Since then the positive outlook has somewhat waned as the US economy has faltered amid fears the deal to raise the debt ceiling will do little to address its current economic predicament. The downgrading of its economy to AA+ from its AAA rating, a position it has held since 1941, has raised further fears over a “double dip recession” and a stalling of the global recovery. With Italy, the third largest economy in Europe showing signs of stress and Greece an ongoing concern, economic uncertainty is again plaguing the traditional economic powerhouses of the ‘West’.
In the Middle East though, things are thankfully looking more positive. Massive investments in infrastructure, backed by more financially secure economies, combined with growing domestic demand as a result of surging population growth places the materials handling sector in a slightly different spectrum to that of its European and US counterparts.
Recent figures released by Washington-based, Institute of International finance (IIF) on the UAE’s financial standing, highlights the contrast between the Middle East and US/ European markets. In late July/early August, the UAE’s initial GDP was actually revised up to 4.4 per cent from an initial forecast of 3.8 per cent.
“Most indicators of economic activity have registered a significant rise in real terms in the first half of this year,” said Garbis Iradian, deputy director of IIF’s Africa/Middle East Department, speaking to Gulf News. “Crude oil production increased by 8 per cent compared to the same period last year. With the exception of real estate, other sectors are also performing well. This has prompted us to revise our forecast,” he added.
The UAE is not the only Middle East country enjoying positive economic figures. Saudi Arabia is also on the upward swing with predictions it will achieve a growth spurt in GDP in 2011. According to the International Monetary Fund (IMF), the Kingdom is expected to achieve 7.5 per cent growth for 2011, up from 3.7 per cent in 2010.