On 28 and 29 March, at the Abu Dhabi National Exhibition Centre (Adnec), MEED held the latest editions of its monthly subscriber briefing series.
The briefings aim to provide MEED subscribers with an exclusive, live update on the outlook for the regional market, and also the opportunity to make new contacts and do some high-level networking with industry peers.
But they also provide MEED with a unique opportunity to canvas market sentiment from its subscribers and to understand the opportunities and challenges facing businesses in the region.
More than 250 people attended the two Abu Dhabi events, which were held in conjunction with PVPC Expo 2018, an international exhibition of pumps, valves, pipes and compressors held every year in the emirate. The attendees represented a cross section of companies from across Abu Dhabi’s construction and oil and gas sectors, and their responses to MEED’s questions provided some useful insights into the state of play in the Abu Dhabi market.
Broadly, the companies represented at the event said that they were very optimistic that the outlook for 2018 was considerably better than their experiences in 2017. About 40 per cent said that 2017 had been a more difficult year for them than 2016, but about 89 per cent in the construction sector said they were optimistic about 2018. This is set against a mere 5 per cent who described their outlook for 2018 as pessimistic. In the oil and gas sector, 68 per cent of respondents described their outlook as optimistic.
Both construction and oil and gas companies said that the biggest challenge facing their companies was winning work, with 49 per cent in the oil and gas sector and 42 per cent in the construction sector saying this was their biggest concern. There was a significant divergence between the two sectors on the next biggest challenge however. Construction companies clearly identified declining profit margins as their second-biggest threat, with 38 per cent citing this issue. But oil and gas industry representatives said the second-biggest challenge for them was finding new opportunities, with 21 per cent naming this issue. This was third on the challenges list for construction companies. Cash flow was also identified as a significant challenge for companies across both sectors.
Across the oil and gas and constructions sectors, government fiscal management was identified as the most important area of government policy affecting their businesses, with an average of 54 per cent of the overall respondents citing this as the key policy area. The second area of economic policy shaping their markets in 2018 will be the oil production policies and the Opec/non-Opec agreement.
Saudi Arabia was identified as the market with the most opportunity outside of the UAE by 74 per cent of construction subscribers and 49 per cent of oil and gas subscribers. Both groups placed Oman second, led more so by oil and gas companies, with a further 27 per cent of respondents naming it as the country with the most opportunity.
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