Dubai private sector optimism at record low

Non-oil sector sees moderate growth in November

Optimism in Dubai’s non-oil private sector fell to a record low in November, according to the latest Emirates NBD Dubai Economy Tracker, even though data in the report reflected moderate growth.

The index bounced back to 53.4 in November from October’s 68-month record low of 51.9 with output, new orders and employment expanding at a quicker pace than a month earlier. A reading of above 50.0 generally means the non-oil private sector is expanding, while below 50.0 indicates its in decline.

But even with data showing a modest rebound, “the degree of optimism slipped to its lowest since the index began in early 2012.” The data is compiled from a monthly survey of business conditions in Dubai’s non-oil private sector, produced by Markit and sponsored by Emirates NBD.

Still, Khatifa Haque, Head of Mena (Middle East and North Africa) Research at Emirates NBD, stated in November’s report that the data “is encouraging”. “Activity in the travel and tourism sector has improved as we head into the ‘high season’ for hospitality, and we expect this trend to continue into Q1 [first quarter] 2016. The strong growth in output and new work in the construction sector supports our view that investment in infrastructure will continue,” she said.

The travel and tourism sector rebounded to positive growth in November. The data suggest the sector is once again hiring. The construction sector remained the best performing sub-sector.