UAE supply chain outlook ‘remains positive’: Index

The latest results revealed that the UAE supply chain outlook remained positive for four quarters in a row.

Image used for illustrative purpose. United Arab Emirates, Dubai, Sheikh Zayed Road

Image used for illustrative purpose. United Arab Emirates, Dubai, Sheikh Zayed Road

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The UAE continued to retain its position in the ‘green category’ for its positive supply chain environment during the fourth quarter (Q4) of 2017, according to the latest CIPS Risk Index released by the Chartered Institute of Procurement & Supply (CIPS).

The latest results revealed that the UAE supply chain outlook remained positive for four quarters in a row.

This follows a global trend of improving economic conditions, despite global challenges such as trade wars and protectionism on the horizon.

The UAE’s positive supply chain environment follows an acceleration in growth for the world’s major economies, contributing to reduced supply chain risk. In fact, the CIPS Risk Index score for Q4 2017 saw a decline in overall operational risks to global businesses for the fourth time in a row.

Sam Achampong, head of CIPS Mena said: “This edition of the CIPS Risk Index shows the UAE as a driver of stability and positive economic conditions in the Mena region. As a strong economy with an overall safe environment, the UAE continues to enjoy its position as a ‘green category’ country, indicating its positive supply chain environment outlook.

“The UAE fosters innovation in technology and invests heavily in infrastructure in line with the country’s government agendas. Leading up to Vision 2021, the supply chain environment will no doubt continue to improve, further establishing the UAE as a leading economy on the world stage.”

Looking at the wider Mena region, there were no high-level changes in the Index in 2017. In fact, the supply chain environment for countries facing some political uncertainty improved and, in turn, benefited cross-border supply routes. As oil prices continue to strengthen and business conditions improve in the region, a delicate balance remains between regional supply chain considerations and geopolitical challenges.

John Glen, CIPS economist said: “Given the threats looming over the global economy, it was a surprise to see overall risk in supply chains improving again for another quarter and the fourth in a row at the end of 2017. The overall Index figure was at its lowest since the first quarter in 2016, as a period of stability descended over global supply chains, but the threat of trade wars between the US and China, also the UK and Europe may severely impact this trend for improvement.”

“Though the Index reported no change to risk in the US and Canada, the undercurrents are showing there are more expected improvements to come in 2018 with predictions for the strongest rebound in economic growth since the recession.

“The drivers for this growth appear to be good labour conditions with more employment in more regions, consumer confidence resulting in strong spending patterns, and businesses benefitting from recent tax breaks as they re-invest their spare capital into business opportunities and higher wages.

Political threats, however, could create an unwelcome adjustment in this trajectory of strong global economic growth, resulting in an undesirable start to what was a promising 2018,”Glen added.

The quarterly CIPS Risk Index, powered by Dun & Bradstreet, tracks the impact of economic and political developments on the stability of global supply chains. It analyses the business continuity factors contributing to supply chain risk across the world, weighing each score according to that country’s contribution to global exports. – TradeArabia News Service

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