Over 1.6m workers employed in Gulf manufacturing sector

The labour force in manufacturing industries in the Gulf has more than doubled from 774,000 workers in 2005 to more than 1.6 million workers in 2015 registering a compound annual growth rate (CAGR) of 7.8 per cent, a new report reveals.

In its report on “Labour Force and Productivity of Manufacturing Industries in GCC Countries”, the Gulf Organisation for Industrial Consulting (GOIC) also announced an increase in the number of manufacturing factories in the Gulf Cooperation Council (GCC). 

According to GOIC labour plays a key role in industrial production and form an added value when coupled with the availability of raw materials. Therefore, labour productivity is seen as a criterion to measure industrial development and the efficient use of the labour force. It also sheds light on the strengths and weaknesses of an industrial activity.”

“The labour force in manufacturing industry in the GCC countries is a main pillar of industrial production, particularly when it comes to small and medium enterprises (SMEs). In fact, these industries rely heavily on labour force and less on capital, as their activities are mainly based on human effort as opposed to big factories that rely on machines and advanced technologies,” the GOIC said.

Furthermore, the manufacture of fabricated metal products that includes a variety of industrial activities like metal products, electrical equipment, transport equipment and others is one of the industrial activities that are in need of labour force the most. Its share of the total manufacturing labour force in GCC countries in 2015 was around 25.8 per cent, followed by the manufacture of cement and building materials (about 16.8 per cent), the manufacture of chemical and petrochemical products (approximately 15.8 per cent), the manufacture of food products and beverages (15.4 per cent) and the remaining industries.

Saudi Arabia was ranked first in terms of labour force in the manufacture of fabricated metal products in GCC countries in 2015. Its share of the total labour force in this sector throughout the GCC was about 53.3 per cent, followed by the United Arab Emirates 28.8 per cent and other GCC states.

Similarly, Saudi Arabia was ranked first in terms of labour force in the manufacture of cement and building materials, as its share was 58.5 per cent of the total labour force working in this field, followed by the UAE 23.6 per cent and other GCC countries. Moreover, Saudi Arabia and UAE have been ranked same in the manufacture of chemicals and petrochemicals, food products and beverages and the manufacture of basic metals. As to the manufacture of textiles, wearing apparel and leather, the UAE was ranked first with 35.9 per cent, followed by Saudi Arabia 35 per cent, Bahrain, Oman and other states.

Net labour productivity in manufacturing industries is calculated by dividing the gross value added (or GDP) of the manufacturing industries by the number of workers. As to labour productivity, it is calculated on the basis of the division of production value with production factors costs by the number of workers. Since there is a lack sufficient data on production value, GOIC focused on the net labour productivity indicator. The more the net labour productivity figure increases compared with the overall labour productivity, the more input waste is reduced, labour is efficient and overall productivity becomes better.

GOIC highlighted that the value of the gross domestic product (GDP) of GCC manufacturing industries more than doubled between 2005 and 2014, with a CAGR of 9.5 per cent.

As to the net labour productivity, i.e. the average annual value of GDP per worker in the manufacturing sector in GCC countries, a gradual improvement is noticed in the average net productivity of the worker in this sector between 2005 and 2014.

Source :Times Of Oman