DUBAI’S NON-OIL PRI­VATE SEC­TOR PICKS UP

▶ Con­fi­dence about the busi­ness out­look con­tin­ued its im­prove­ment

The National - News - - BUSINESS - DEENA KAMEL

Dubai’s non-oil pri­vate sec­tor econ­omy im­proved in June, sig­nalling an end to the three­month down­turn trig­gered by the Covid-19 pan­demic, as the emi­rate re­laxed re­stric­tions to con­tain the virus.

The sea­son­ally ad­justed IHS Markit Pur­chas­ing Man­agers’ In­dex read­ing for Dubai rose to the neu­tral 50 thresh­old last month, up from 46 in May. A read­ing above 50 is an in­di­ca­tor of eco­nomic ex­pan­sion, while any­thing be­low points to a con­trac­tion.

“The lat­est PMI sur­vey data of­fered hope­ful signs for the Dubai non-oil pri­vate sec­tor,” said David Owen, an econ­o­mist at IHS Markit. The head­line PMI marked “a no­table im­prove­ment from the se­vere down­turn dur­ing the coro­n­avirus pan­demic”.

Busi­ness ac­tiv­ity rose for the first time since Fe­bru­ary with new work pick­ing up, al­though as in other economies around the world dur­ing the pan­demic-in­duced slow­down, pay­roll num­bers fell.

“Busi­ness ac­tiv­ity was back in pos­i­tive ter­ri­tory,” Mr Owen said. “Some sec­tors were on the path back to nor­mal­ity, ac­cord­ing to sur­vey re­spon­dents, though oth­ers pre­sented a more cau­tious pic­ture, find­ing that de­mand in some ar­eas, no­tably travel and tourism, was still ex­tremely weak.”

Dubai, a main tourism and fi­nan­cial hub in the Mid­dle East, re­opened its bor­ders and lifted night cur­fews.

Out­put grew for busi­nesses for the first time in four months and at a “solid rate”, as ac­tiv­ity picked up fol­low­ing loos­ened re­stric­tions.

Last month’s uptick in busi­ness ac­tiv­ity was reg­is­tered in Dubai’s con­struc­tion, re­tail and whole­sale sec­tors. How­ever, sim­i­lar to the rest of the world, travel and tourism re­mained in de­cline, al­though busi­ness ex­pec­ta­tions turned pos­i­tive for the first time since March.

Dubai opened it doors to in­ter­na­tional vis­i­tors on July 7 and ex­pects its tourism in­dus­try to re­bound this year as other coun­tries be­gin to ease travel re­stric­tions, He­lal Al Marri, di­rec­tor gen­eral of the Dubai Depart­ment of Tourism and Com­merce Mar­ket­ing, told Bloomberg TV.

Emi­rates has re­sumed flights and is expanding its net­work to 52 des­ti­na­tions this month. Fly­dubai has also restarted ser­vice to 24 des­ti­na­tions, with more routes ex­pected to be added over the sum­mer.

While over­all busi­ness ac­tiv­ity and new work lev­els rose in June, there was a fur­ther re­duc­tion in em­ploy­ment in the pri­vate sec­tor.

Sup­plier prices in­creased dur­ing June, lead­ing to a slight rise in over­all ex­penses at nonoil pri­vate sec­tor com­pa­nies. How­ever, the rate of in­fla­tion was eased by ad­di­tional salary cuts and lower work­force num­bers.

In June, busi­ness con­fi­dence strength­ened for the sec­ond month run­ning as Dubai took steps to­ward nor­mal ac­tiv­ity by re­lax­ing move­ment re­stric­tions. More com­pa­nies are op­ti­mistic that ac­tiv­ity will grow over the com­ing year, up from a record low in April.

Mean­while, Abu Dhabi is plan­ning to at­tract tech­nol­ogy com­pa­nies and skilled work­ers to ac­cel­er­ate its eco­nomic recovery early next year, in the wake of the pan­demic and lower oil prices, Mo­hammed Ali Al Sho­rafa, chair­man of the Depart­ment of Eco­nomic Devel­op­ment, told Bloomberg on Thurs­day.

The emi­rate wants to de­velop “the knowl­edge sec­tor and in­no­va­tion by at­tract­ing tech­nol­ogy com­pa­nies to put down roots in Abu Dhabi”, he said.

Abu Dhabi has beefed up its spend­ing on cap­i­tal projects, in­vest­ing in start-ups and strate­gic in­dus­tries – es­pe­cially agri­cul­ture tech­nol­ogy – and con­sid­er­ing low­er­ing the cost of liv­ing in the emi­rate, he said.

“Be­ing com­pet­i­tive is not only re­duc­ing fees. But hav­ing the right liv­abil­ity as­pects for peo­ple com­ing, liv­ing, ed­u­cat­ing and ac­tu­ally re­tir­ing in Abu Dhabi,” Mr Al Sho­rafa said. The cost of ed­u­ca­tion, hous­ing and even en­ter­tain­ment will be as­sessed.

Reem Mo­hammed / The Na­tional

Dubai’s busi­ness ac­tiv­ity rose in June to its high­est since Fe­bru­ary

Newspapers in English

Newspapers from UAE

© PressReader. All rights reserved.