Dubai non-oil growth rebounds from 68-month low

UAE real estate not as vulnerable to shocks as it was in 2009

Dubai’s private sector recorded a modest rebound in business conditions (including new orders, employment and output) in November compared with the previous month, where output growth came in at a 68-month low.

According to the Emirates NBD Dubai Economy Tracker Index, the non-oil private economy picked up from 51.9 in October to 53.4 in November. A value below 50 indicates a contraction.

 The latest reading was comfortably above the neutral 50.0 value, but signalled a slower pace of improvement than the average since the series began in 2010 (55.3). Stronger output growth was a key factor boosting the headline index in November,” Emirates NBD said in a press statement.

The index was aided by improved activity in the travel and tourism sector as the emirate heads into the high season. Last month, the travel and tourism sector had shown a moderate contraction, so the improvement signalled a “change in direction”.

Construction, though, experienced the fastest rise in business activity, followed by wholesale and retail, and the overall rate of employment growth reached a three-month high, “led by a robust pace of hiring among construction companies”.

“The strong growth in output and new work in the construction sector support our view that investment in infrastructure will continue to contribute to growth in Dubai’s economy, despite sharply lower oil prices,” said Khatija Haque, Head of MENA Research at Emirates NBD.

However, business confidence, while remaining positive, saw optimism slipping to its lowest since this index began in early 2012. Average cost burdens also increased while selling prices were reduced for the tenth month running.


Earlier last week, Emirates NBD also released its UAE PMI (purchasing managers index), which showed non-oil private sector expansion strengthening after having eased to a two-and-a-half year low during October.

The headline PMI came in at 54.5 as “business conditions improved solidly, with the highlight being a marked and sharper rise in output. New business and employment also increased, although growth in the former was the weakest since April 2012.”

Companies saw their pricing power diminish and input costs rose further, much in line with the trend witnessed in Dubai.