Dubai busi­ness growth slow­est since 2012: re­port

The Pak Banker - - BUSINESS -

The Dubai Econ­omy Tracker data for July showed sus­tained in­crease in busi­ness ac­tiv­ity and pri­vate sec­tor out­put growth sup­port­ing five-and-a-half years of con­tin­u­ous ex­pan­sion.

The tracker data from a monthly sur­vey of busi­ness con­di­tions in the Dubai's non-oil pri­vate sec­tor, spon­sored by Emi­rates NBD and pro­duced by Markit, gives an early in­di­ca­tion of op­er­at­ing con­di­tions in Dubai.

Although the out­put growth con­tin­ued to be pos­i­tive, growth mo­men­tum mod­er­ated to its weak­est recorded since March 2012 amid softer con­tri­bu­tions from all three key sub-sec­tors mon­i­tored by the sur­vey.

"The soft­en­ing in ac­tiv­ity in July is in line with other anec­do­tal re­ports, and prob­a­bly re­flects the im­pact that a stronger dirham and lower oil prices may be hav­ing on pri­vate sec­tor out­put and sen­ti­ment. Nonethe­less at 53.1, the head­line num­ber still sug­gests rel­a­tively firm growth in the non-oil econ­omy, and it is es­pe­cially en­cour­ag­ing that de­spite the slow­down, firms in all three sur­veyed sec­tors re­main ex­tremely up­beat about fu­ture busi­ness ac­tiv­ity," said Tim Fox, Chief Economist at Emi­rates NBD

Sur­vey re­sults showed pri­vate sec­tor com­pa­nies op­er­at­ing in Dubai are highly up­beat about their busi­ness ac­tiv­ity prospects for the year ahead. This in turn con­trib­uted to another rise in em­ploy­ment num­bers in July. Mean­while, the latest sur­vey sug­gested that pres­sure on mar­gins per­sisted, as in­put costs in­creased over the month and av­er­age prices charged de­clined marginally across the pri­vate sec­tor.

"The rate of job cre­ation across Dubai's pri­vate sec­tor econ­omy re­mains rel­a­tively buoy­ant. The whole econ­omy em­ploy­ment in­dex was 53.3 in July, which is slightly be­low June's read­ing of 54.2, but still rep­re­sents the sec­ond-fastest rate of pay­rolls growth in the past five months. New Or­ders growth also mod­er­ated in July, which pan­elists at­trib­uted to more cau­tious spend­ing pat­terns among clients," said Jean-Paul Pi­gat, Se­nior Economist at Emi­rates NBD

For the sixth con­sec­u­tive month, firms re­duced their selling prices due to com­pet­i­tive pres­sures and at­tempts to stim­u­late de­mand. In­deed, in July the Prices Charged in­dex hit 49.5, up marginally from 49 and 48 in June and May re­spec­tively. At the same time, in­put prices in­creased at the fastest pace since Fe­bru­ary (52.9), sug­gest­ing that mar­gins re­main un­der pres­sure.

Ac­tiv­ity across the whole­sale and re­tail trade sec­tor ex­panded, but at a slightly weaker pace rel­a­tive to June. The out­put in­dex hit 51.7 (com­pared to 54.9 the prior month), with both the em­ploy­ment and new work in­dices re­main­ing broadly sta­ble at 53.4 and 55.2 re­spec­tively. Re­spon­dents at­trib­uted the rise in new busi­ness vol­umes to com­pet­i­tive pric­ing strate­gies.

Af­ter peak­ing at 77 in June, the busi­ness ex­pec­ta­tions in­dex dipped in July, how­ever at 70.7, it is clear there is still a sig­nif­i­cant de­gree of op­ti­mism about the out­look for this in­dus­try.

Ac­tiv­ity within the travel and tourism in­dus­try posted the sharpest drop in July rel­a­tive to June, how­ever still showed a slight de­gree of ex­pan­sion. The Out­put in­dex fell to 50.5, com­pared to 55.3 in the prior month, while the Em­ploy­ment and New Work in­dices both reg­is­tered read­ings of 52.6. The sea­son­ally ad­justed In­put Cost In­dex rose to its high­est level in the five­month time se­ries (53.1), which was at­trib­uted to in­creased pur­chase prices and salary costs.

Newspapers in English

Newspapers from Pakistan

© PressReader. All rights reserved.