Emirates NBD statistics show a degree of optimism not seen for the past six and a half years
The rate of growth of Dubai’s non-oil private sector in August was roughly comparable to the month before, albeit with overall inflows of new business at the slowest pace since April, according to Emirates NBD’s Dubai Economy Tracker Index.
According to the seasonally adjusted statistics, the travel, tourism and construction sectors saw softer growth in August compared to July, while the wholesale and retail sectors saw fractionally higher growth.
“Output rose at a faster rate than in July, driven by ongoing projects, but new order growth slowed modestly last month,” said Khatija Haque, head of MENA research at Emirates NBD.
Haque added that the vast majority of firms – 94 percent – reported no change in their staffing levels in August. However, the slight increase extended the current sequence of expansion to five months, with many firms reporting higher payroll figures linked to higher output requirements.
The statistics show that business activity increased again in August, continuing a sequences of expansion recorded since March 2016, with a rate of growth above the historical average and the sharpest seen in three months. Evidence from some firms suggests that the improving output was due to ongoing projects.
Despite a slower improvement in new work during August, the Emirates NBD data shows a rate of growth that remained marked overall, with some firms reporting growth being driven by promotional activity and marketing campaigns.
Emirates NBD found that business activity expectations had risen, with a degree of optimism not seen for the past six and a half years. Anecdotal evidence suggests that Expo 2020 Dubai is expected to stimulate growth across the entire private sector economy.
Additionally, the average cost burdens faced by companies in Dubai’s private sector was found to have increased for the fifth month running, although it eased slightly from July.
Lastly, selling prices were found to have fallen due to promotional activity, although the rate of price discounting softened from July.
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