Sharjah achieved a nominal GDP growth of 19.9% in 2006, growing from AED35bn ($9.5bn) in 2005 to AED42.8bn ($11.66bn) in 2006, according to the Sharjah Economic Development Department (SEDD).
Industrial activities have long been a staple of the emirates' development and remain at the core of its economy. It is estimated that between 40 and 50% of the United Arab Emirates' total industrial activity is located in Sharjah, with over 3,000 industrial facilities. Small and Medium Enterprises (SMEs) account for most of the industrial activity, operating in a variety of sectors.
In 2006, manufacturing as a share of GDP reached AED7bn ($1.9bn) - a 15.7% increase over the previous year - while gross output grew by 18.6%. The Hamriyah Free Zone - a 10m sq metres area established in 1995 and dedicated to industrial and commercial activities - has been instrumental in the expansion of Sharjah's industrial base. It now hosts more than 1,100 companies, a figure that keeps increasing. Its success is mainly due to the fact that, contrary to the city's other industrial zones, it allows 100% foreign ownership as well as 100% import and export tax exemptions. Although land prices have soared, real estate is still cheaper than in Dubai. Besides, the government heavily subsidises energy and water prices, a boon to high-consuming industries.
Furthermore, the emirate of Sharjah has built itself an enviable reputation as a regional trading hub, mainly thanks to its two ports located on the Gulf - Port Khaled and Hamriyah Port, the latter as part of the Hamriyah Free Zone - and Khor Fakkan on the Indian Ocean. Sea and air traffic has grown more than 50% in the past few years, which testifies to the vital role of Sharjah's ports and international airport for the local economy, and has allowed it to grab a significant share of regional trade, mostly with Iran, Kuwait, Saudi Arabia, India, and Qatar, its top 5 trade partners.
Meanwhile, 2006 was a busy year for Sharjah Airport International Free Zone (SAIF Zone), with almost 700 companies establishing operations, bringing the total to 2738 companies at the end of 2006.
While figures for 2006 have not yet been disclosed, total foreign trade in 2005 was well in excess of AED 20bn ($5.4bn). Since 2000, trade has grown by 20% on average per year and 2006 should be no exception.
Growth should remain strong in 2007. In the first three months, the SEDD issued 1462 new business licenses and renewed 9,626 others, while the AIF Zone registered 121 new operations during the same period. Combined with the authorities' commitment to improve basic infrastructure and reduce red tape even further, several major developments intended to promote industrial and commercial growth should provide room for even more growth.
Al Hanoo's Emirates Industrial City, currently under development, will provide space for over 3000 light and medium industrial operations, as well as commercial and residential space, over a total area of 7.7m sq metres. Sharjah Investment Center, a similar project pushed by regional property development firm SNASCO, will provide an additional 2.9m sq metres for light and medium industrial use, in addition to commercial and residential areas.