UAE Q2 job growth slows as oil prices plummet

The ongoing oil price volatility has dampened hiring in the United Arab Emirates, leading to a quarter on quarter drop in jobs available, a new report has found.

According to Morgan Mckinley’s UAE Quarterly Employment Monitor, recruitment activity in the second quarter of 2015 slipped by one per cent from the previous quarter.

The company noted that 8,109 professionals were hired in Q2 2015, compared to 8,213 in Q1 2015.

The study is also significant because it indicates an actual fall in recruitment activity and not a slowdown in the growth of jobs.

Morgan Mckinley reported a 6 per cent decline in professional jobseekers in the UAE job market during the first two quarters of this year.

“The number of job seekers has decreased; this is quite worrying as there are many other options available for them – if you look at the employment market in the UK, Ireland, America, Australia and Asia, there is no need to come to the UAE anymore and yet two years ago everyone was looking to work in Dubai”, said Morgan McKinley’s managing director for the Middle East and North Africa Trefor Murphy.

“The market has stabilised over Q2 2015, but without any real growth in the overall professional hiring market. The oil price went back up to $60 per barrel toward the end of the quarter, but it needs to go up by a further $5-$10 a barrel to make new drilling and exploration projects viable.”

Slow summer months and Ramadan have also impacted recruitment activity, he added.

“The banking sector has had a strong start to the quarter but certainly slowed down over the Ramadan period,” Murphy said.

But he said that the banks’ plans to aggressively expand their international network could push up hiring in the sector.

Fast moving consumer goods, pharmaceutical, tourism and hospitality recorded a growth in jobs despite the seasonal slowdown, the report showed.

“The property market is growing by 10 per cent, which is strong as an individual sector, and manufacturing is growing by 6 per cent while banking is seeing 3-4 per cent growth,” said Murphy.

But other sectors were not as active in terms of job growth, remaining flat.

Despite the temporary gloom, Murphy predicted that the UAE’s professional job market would record a growth rate of 5 to 10 per cent in the remaining half of 2015.

However, he cautioned that such a rebound is largely dependent on the stability of oil prices.

Brent crude prices hit a multi-month low this week as oil output by Organization of the Petroleum Exporting Countries reached an all time high, flooding the oil market.

The report also highlighted the possibility of oil prices falling further this year mainly due to the supply glut that could be caused with additional oil from Iran coming into the market.

“The problem is that there is much oil sitting around and this will increase the supply of oil on the market. In turn oil prices could drop even further, and oil-dependent countries such as the UAE could in turn see a decline in jobs growth,” Morgan Mckinley noted.