Both output and new work increased sharply last month but at a slower rate than in previous months
Dubai's non-oil economic growth slowed in April as employment generation, output and new work improved at a slower pace.
The Dubai Economy Tracker Index (DET), released by Emirates NBD, declined to 53.9 in April from 55.3 in March and from a 2018 high of 56.0 in January.
Both output (57.1) and new work (58.0) increased sharply last month but at a slower rate than in previous months.
The employment index signalled a marginal increase in jobs last month, with the index at 50.3, up from 49.7 in March. The majority of firms surveyed, however, signalled no change in employment in April.
Staff costs also rose last month, with this contributing to higher input costs overall in April. The input cost index rose to 54.3, the highest reading since January, when VAT pushed the index up to 59.2.
Selling prices were, however, largely unchanged, with the output price index rising to 50.2, only just above the neutral level despite the much higher input price inflation. Businesses were more optimistic in April despite the weaker new order growth and higher production costs. More than half of all firms surveyed expected their output to be higher in 12 months' time, while only 4.5 per cent expected a decline.
"The softer Economy Tracker Index in April appears to reflect weaker inventory accumulation as well as slower output and new work growth. However, demand still appears to be relatively robust," said Khatija Haque, head of Mena research at Emirates NBD.
Weaker output and slower new order growth were the main drivers behind the -2.8 point decline in the wholesale and retail trade index in April.
Employment in the sector was broadly unchanged with this index only just below the neutral level at 49.9 in April. However, this is the first sub-50 reading for employment since March 2017.
The travel and tourism sector index declined to a 4-month low of 55.3 in April on the back of softer output and new work growth. Employment increased modestly on average after 2 months of decline in the sector. Firms absorbed higher input costs, as selling prices declined marginally for the second month in a row. Overall, businesses in the travel and tourism sector were slightly more optimistic about their prospects in the coming year than they were in February and March.
The construction sector index rose to 54.9 in April from 53.2 in March, the highest reading since January.
Output and new work grew at the sharpest rate since the start of the year, and employment rose by the most since November 2015. Firms cited new project wins and strong domestic demand in April, and optimism about future output rose to a 3-month high.
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