Dubai’s non-oil economy improved in March on Covid vaccine optimism ECONOMY

Dubai’s non-oil private sector economy continued to recover last month as the emirate’s Covid-19 vaccination programme helped to improve business sentiment, with output and new orders rising.

The emirate’s seasonally adjusted IHS Markit purchasing managers’ index reading stood at 51 in March, up from 50.9 in February, as operating conditions improved for the third consecutive month.

A reading above a neutral 50 level indicates economic expansion while one below that points to a contraction.

Companies remained confident of an improvement in business activity in the coming year as Dubai’s economy bounces back from the coronavirus-induced slowdown.

Client demand also strengthened, driving expectations of better business prospects, according to the survey.

Headline readings for the construction and travel and tourism sectors, two key contributors to economic activity in the emirate, improved last month.

Construction recorded the strongest growth across the sub-indexes, with companies in the sector registering the second-sharpest increase in output since the middle of 2019.

“Sector data ... pointed to a surge in construction output, particularly, as some projects were able to resume after the easing of Covid-19 restrictions,” said David Owen, an economist at IHS Markit.

In terms of the overall nonoil private sector economy, the latest data pointed to a rise in output for a fourth consecutive month in March, supported by a sharp increase in new orders.

The UAE had inoculated more than 9 million people as of Sunday and its vaccine distribution rate stood at 91.05 doses for every 100 people. The number of infections has steadily declined in recent weeks.

Dubai, the commercial and tourism centre of the Middle East, unveiled five stimulus packages worth Dh7.1 billion ($1.93bn) to soften the economic impact of the pandemic and support businesses and people.

The emirate extended some of the initiatives in January for another six months to the end of June.

Its economy is expected to expand by 4 per cent this year, according to government projections released in December.