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DIFC Economic Activity 2010 Survey Results
Value Added Accounting of DIFC
Presentation to Media Roundtable
18 July 2011
Dr. Nasser Saidi, Chief Economist, DIFC Authority
1
Agenda
Objectives of the Economic Activity Survey
Distribution of DIFC Companies by Economic Activity
GDP By Type of Economic Activity in DIFC
Breakdown of GDP By Type of Economic Activity in DIFC for 2010
Employment in the DIFC
2
Objectives of the Economic Activity Survey
1. Measure the size and level of economic performance of the DIFC
sub-economy and its contribution to Dubai’s and the UAE’s GDP.
2. Estimate & make projections of the trend and rate of DIFC
economic growth in relation to other countries’ financial sectors
and/or regional financial centers.
3. Understand the sectorial activities structure of the DIFC subeconomy and its variations.
4. Assist the DIFC Authority formulate strategy and appropriate
development plans & policies.
6. To develop strategic targets for different business sectors in the
DIFC
7. Help businesses in forecasting future demand for their services
& products.
3
Data Collection Process
•
Data were collected using DIFCSTAT, the online portal that provides
companies with a secure, interactive and web based platform to collect
company data including statistical survey information. The link below shows
the DIFCSTAT portal. A total of 477 entities completed the survey
questionnaire (a high response rate of 62% out of a total population of 773).
•
The questionnaire consisted of 5 sections on different components of value
added based on UN-OECD National Income Accounting standards.
DIFCSTAT allowed an interactive data collection process where validation
rules were applied to alert the clients to errors in data entry.
•
Following online submission, Economics Department staff reviewed the data
to ensure data quality and integrity , and approved the forms accordingly.
•
In some cases, survey questionnaires were returned back to the clients with a
request for further clarification. Clients accordingly had to review the data and
re-submit again. This has ensured the highest possible quality of survey
responses. While every effort was made to verify submission, we are not in a
position to conduct on-site verification of data and rely on data provided by
companies.
4
Distribution of DIFC
Companies by Economic
Activity
Distribution of DIFC Companies by Economic Activity
•
•
•
•
•
In 2010, the number of active entities in DIFC rose at an 9.5% annual rate to reach 773.
At end December 2010, there were 310 active DFSA-regulated and 459 active nonDFSA regulated companies at the Centre in addition to public administration, government
& the DIFC Courts.
They represented 40% and 59% respectively of the total companies operating within the
DIFC’s business community.
The regulated firms included 258 Authorized Firms, 50 Ancillary Service Providers and
two Authorized Market Institutions (Nasdaq-Dubai and DME).
These were supported by 459 non-regulated firms offering business infrastructure and
services necessary for the activities of regulated firms.
ISIC Code
Economic Activities
Year 2007
Year 2008
Year 2009
Year 2010
K
Financial services
257
366
354
383
H,M,N,P,J
Business services
199
287
290
302
Retails & Accommodations
44
59
58
84
Public Administration
5
3
4
4
505
715
706
773
G, I
O
Total
Source: DIFC Economics
6
GDP By Type of
Economic Activity in DIFC
GDP By Type of Economic Activity in DIFC
•
The fourth survey of Economic Activity at the DIFC places the total value added of
the DIFC sub-economy at USD 2.915 billion or approximately 1% of UAE GDP as
estimated by the IMF and approximately 3.6% of Dubai’s estimated 2010 GDP.
The sector breakdown shows that the financial sector accounts for 72% of the total
value added within the DIFC, while the business services accounts for 27%.
Public administration (DIFCA, DFSA, DIFC Courts) reported only a minor contribution.
•
ISIC
Code
Economic Activities
Financial Intermediation
No. No. (%) Value
Value
(%)
383
49.5
2,099.4
72.0
386
49.9
772.8
26.5
4
0.5
43.5
1.5
773
100
2,915.6
100
K
H,M,N,
Business services
P,J
O
Public administration
Total
Source: DIFC Economics
8
Comparison with Previous Years
According to the estimates, DIFC Nominal GDP increased from USD 2,771.7
million to 2,915.6 or by 5.2% between 2009 and 2010, in line with the growth
in most major financial centers around the world due to global economic
recovery and support of the banking & financial sectors.
ISIC
Code
K
Economic
Activities
Financial
Intermediation
H,M,N,P,
Business services
J
O
Public administration
Total
2007
2008
2009
2010
1,514.7 2,224.6 2,029.6 2,099.4
295.2
550.7
687.5 772.8
28.8
64.2
54.5
43.5
1929.7* 2,839.6 2,771.7 2,915.6
Change
(%)
3.4
12.4
(20.3)
5.2
Country
% YOY
Hong Kong
7.9%
Luxembourg
16.8%
UK
0.8%
USA
5.4%
Bahrain
5.8%
Singapore
9.9%
*The total GDP for 2007 also includes DIFC estimates for non-respondent companies;
hence the breakdown by sector does not add up to the total.
Source: DIFC Economics
9
Detailed Breakdown of
GDP By Type of
Economic Activity in
DIFC for 2010
Breakdown of GDP By Type of Economic Activity in DIFC for 2010
•
Within financial activities, insurance reported a comparatively low value added, while the
broadly categorized Activities auxiliary to financial service and insurance, which include,
capital market, advisory and investment banking has gained an importance on par with
core financial activities.
•
Non-financial activities which make up a quarter of total value added in the DIFC are
dominated by “Professional, Scientific and Technical activities”.
ISIC Code
Economic Activities
Count
%
Value
%
K
Financial Intermediation
383
49.5
2099.4
72.0
64
Financial service activities
194
25.1
1081.5
37.1
65
Insurance, reinsurance and pension funding
9
1.2
103.3
3.5
Activities auxiliary to financial service and insurance
180
23.3
914.5
31.4
Business services
386
49.9
772.8
26.5
66
M,N,P,J
H
Transportation and storage
2
0.3
62.2
2.1
J
Information and communication
24
3.1
39.5
1.4
L
Real estate activities
4
0.5
36.0
1.2
M
Professional, scientific and technical
214
27.7
531.9
18.2
N
Administrative and support service
44
5.7
61.4
2.1
P
G
Education
14
1.8
16.8
0.6
Retail & wholesale trade, Hotels & Restaurants
84
10.9
25.0
0.9
O
Public administration
4
0.5
43.5
1.5
773
100.0
2915.6
100.0
11
Total
Breakdown of GDP By Type of Economic Activity in DIFC for 2010
• Within the financial service activities class, Monetary Intermediation accounted for
some 16% of sub-sector value added; the largest contribution was by Holding
companies, 18%, and Investment companies at 17%.
• The financial auxiliary class that comprises Managing Assets, Advising on Financial
Products or Credit, Providing and Arranging Custody, Operating an Exchange etc.
contributed an overall 44%.
• The insurance sub-sector (mainly re-insurance) contribution was small at 5%.
ISIC Code
64
Economic Activities
Financial service activities, except insurance and
pension funding
Count
%
Value
%
194
50.7
1,081.5
51.5
641
Monetary intermediation
15
3.9
334.7
15.9
642
Activities of holding companies
110
28.7
383.0
18.2
643
Trusts, funds and similar financial entities
69
18.0
363.8
17.3
9
2.3
103.3
4.9
180
47.0
914.5
43.6
383
100.0
65
Insurance, reinsurance and pension funding
66
Activities auxiliary to financial service and insurance
Total
2,099.4 100.0
Source: DIFC Economics
12
Breakdown of GDP By Type of Economic Activity in DIFC for 2010
•
Business activities was dominated by “Professional, Scientific and Technical activities”
69%. Within this class Head offices & Consulting and Legal & Accounting contributed
35% and 34% respectively.
Classification of Business Activities
Count
%
Value
%
H Transportation and storage
2
0.5
62.2
8.0
J Information and communication
24
6.2
39.5
5.1
L Real estate activities
4
1.0
36.0
4.7
M Professional, scientific and technical
214
531.9
69
Legal and accounting
50
55.4
13.0
263.4
68.8
34.1
70
Activities of head offices; management consultancy
164
42.5
268.5
34.7
ISIC
701
Activities of head offices
85
22.0
99.6
12.9
702
Management consultancy
79
20.5
168.9
21.9
N Administrative and support service
44
11.4
61.4
7.9
P Education
14
3.6
16.8
2.2
84
386
21.8
100.0
25.0
772.8
3.2
100.0
G, I Wholesale, retail trade & Accommodations
Total Business Activities Sector
13
Employment in the DIFC
Employment in the DIFC
• According to the survey, DIFC companies employed 11,331 people, 7,427 men
(66%) and 3,904 women (34%).
• There is an estimated drop of 3.1% in total employment compared to 2009, with a
significant decline attributable to the public administration sector, as a result of
rationalization and restructuring measures.
• Employment of UAE nationals was 247, or 3% of the total workforce. Expatriates
account for 98% of total male employees & 97% of female employees.
• The largest sector by workforce is financial intermediation and services, with 52% of
the total.
UAE Nationality Workers
Economic Activities
UAE Males UAE Females
Non UAE Nationality Workers
Total Workers
Subtotal
Non UAE
Males
Non UAE
Females
Subtotal
Males
Females
Subtotal
Financial
Intermediation
76
54
130
3,946
1,622
5,568
4,022
1,676
5,698
Business services
29
16
45
3,220
2,067
5,287
3,249
2,083
5,332
Public administration
26
46
72
130
99
229
156
145
301
Total
131
116
247
7,296
3,788
11,084
7,427
3,904
11,331
15
Educational Attainment of the DIFC Workforce
•
•
By education, the DIFC workforce constitutes 60.3% university graduates,
while slightly more than a quarter hold post-graduate degrees.
Around 85% of both men and women are university graduates and above,
underscoring the availability of a highly skilled workforce, irrespective of
gender.
16
DIFC Workforce Demographic Characteristics
•
•
•
Workforce in the DIFC is predominantly male, accounting for 65.5% of total.
Breakdown by working status in the DIFC reveals that some 94.2% of the
labour force is employed as salaried, while a similar percent (96.03%)
belongs to the age group of between 25-59.
While the age group 24 & below are few, those 60 and above mostly work
for no wage/ non-remunerated or are self-employed.
Working status of DIFC Workforce by Age
Sex
Working status
Male
Female
1. Employers
492
117
2. Self Employed
17
3
6,898
3,776
4. Work for no wage/non
remunerated
21
8
Total
7,427
3. Salaried
3,904
Work for no wage/non
remunerated
Salaried
Self Employed
Employers
24 & below
25-59
60 & above
0%
20%
40%
60%
80%
100%
17
DIFC 2010 ECONOMIC ACTIVITY SURVEY
Q&A