Business activity in Dubai weakest since 2012
Dubai witnessed the weakest expansion of overall business activity since March 2012, says survey data by Emirates NBD Dubai Economy Tracker released today (Monday, August 10).
The non-oil private sector, as well as the travel and tourism, retail and construction sectors, recorded slower rates of output growth.
July’s Tracker signaled another increase in overall business activity across Dubai’s private sector economy, which marked five-and-a-half years of continuous expansion. “However, growth momentum moderated to its weakest recorded since March 2012 amid softer contributions from all three key sub-sectors monitored by the survey.”
Private-sector companies operating in Dubai are, nonetheless, still highly upbeat about their business activity prospects for the year ahead, according to the latest survey data. “This in turn contributed to another rise in employment numbers in July. Meanwhile, the latest survey suggested that pressure on margins persisted, as input costs increased over the month and average prices charged declined marginally across the private sector, it says.
Commenting on the Emirates NBD Dubai Economy Tracker, Tim Fox, Chief Economist at Emirates NBD, says: “The softening in activity in July is in line with other anecdotal reports and probably reflects the impact that a stronger dirham and lower oil prices may be having on private sector output and sentiment.
“Nonetheless, at 53.1, the headline number still suggests relatively firm growth in the non-oil economy and it is especially encouraging that, despite the slowdown, firms in all three surveyed sectors remain extremely upbeat about future business activity.”
At 53.1 in July, the seasonally adjusted Emirates NBD Dubai Business Activity Index posted above the 50.0 no-change value, as has been the case in each month since February 2010. However, the latest reading was down from 55.5 in June, to signal that output growth was the slowest recorded for just under three-and-a-half years and only moderate overall, says the tracker, adding: “Construction remained the best-performing broad area of activity in July, while travel and tourism, as well as wholesale and retail, saw only marginal rises in business activity.”
Staff numbers rose across the Dubai private sector as a whole in July, which continued the upward trend seen in each month since January 2012. Although the rate of job creation eased since June, the latest expansion was still the second-fastest seen over the past five months, the Tracker says.
Sponsored by Emirates NBD and produced by Markit, the survey provides an early indication of operating conditions in Dubai. It covers the Dubai non-oil private sector economy, with additional sector data published for travel and tourism, wholesale and retail, and construction.