Dubai non-oil private sector slows despite higher output levels ECONOMY
Business conditions in Dubai’s non-oil private sector expanded at the slowest rate in three months in July, even as output improved due to a rise in new orders, according to the latest survey from Emirates NBD.
The Emirates NBD Dubai Economy Tracker Index – a composite indicator designed to give an accurate overview of operating conditions in the non-oil private sector economy – registered 54.9 in July, down from 56.0 in June, below the long-run average, although there was still an overall improvement, Emirates NBD said.
A reading below 50 indicates that the non-oil private sector economy is generally declining, above 50 it is generally expanding. A reading of 50 signals no change.
“While firms reported higher output and new orders in July, this was on the back of extensive price discounting, with average selling prices falling at the sharpest rate since January 2017,” said Khatija Haque, head of Mena research at Emirates NBD, Dubai’s largest lender by assets.
“At the same time, input costs continued to rise, further squeezing margins. Against this background, it is unsurprising that employment growth so far this year has been the softest on record.”
Construction companies reported the sharpest growth in July, at 56.9, followed by wholesale and retail at 56.3 and travel and tourism showing a reading of 54.5. All three sectors experienced softening growth compared to June.
Businesses reported a sharp improvement in incoming new work in July, driven by client demand and promotional activity.
Sentiment and expectations remained strongly optimistic despite easing to a three-month low in July, with companies pinning hopes on new projects relating to Expo 2020 Dubai, and successful marketing, said Emirates NBD.