Saturday 17 November 2018

The sector saw sharper expansions in output and new orders.

Dubai non-oil private sector sees big surge in June

DUBAI, July 10, 2017

Dubai’s non-oil private sector gathered steam in June, registering improvements in the overall business conditions with wholesale and retail as the best performing category, according to the latest Emirates NBD Dubai Economy Tracker Index.

The seasonally adjusted Index – a composite indicator designed to give an accurate overview of operating conditions in the non-oil private sector economy – registered at 56.5, up from May’s seven-month low of 55.0. Notably, the latest reading was above the long-run series average (55.2).

By sector, wholesale & retail (index at 58.0) was closely followed by construction (index at 57.4). The travel & tourism sector (54.4) experienced the slowest improvement in business conditions.

A reading of below 50.0 indicates that the non-oil private sector economy is generally declining; above 50.0, that it is generally expanding. A reading of 50.0 signals no change.

The survey covers the Dubai non-oil private sector economy, with additional sector data published for travel & tourism, wholesale & retail and construction.

Commenting on the Emirates NBD Dubai Economy Tracker, Khatija Haque, head of Mena Research at Emirates NBD, said: “The June Dubai Economy Tracker survey supports our view that Dubai’s economy has grown at a faster rate in H1 2017 compared with the same period last year.  The wholesale and retail trade sector likely benefitted from increased household spending during Ramadan, which was in June this year, while the increased activity in the construction sector probably reflects progress on a number of infrastructure projects in Dubai.”

Key findings

•    Dubai Economy Tracker Index registers at 56.5 in June
•    Sharper expansions in output and new orders
•    Renewed fall in output charges

Business activity and employment

The overall improvement in the health of Dubai’s private sector reflected another sharp rise in business activity. The rate of growth accelerated from May’s seven-month low, and was sharp overall. The combination of more projects, promotional activities and inflows of new business contributed to greater business activity, according to anecdotal evidence.

Continuing the trend observed during the previous three months, employment rose during June. However, the pace of job creation was marginal overall. An increase in payroll numbers across the wholesale & retail sector offset declines seen in the construction and travel & tourism sectors.
Incoming new work and business activity expectations

Inflows of new business continued to rise for the sixteenth consecutive month during June. The rate of expansion was faster than May’s seven-month low, matching the trend seen for output. Survey respondents reported that the increase in new orders was supplemented by enhanced marketing and promotional discounting initiatives.  

Despite sharper improvements in the health of all three key sub-sectors, business confidence towards the 12-month outlook slowed to the weakest since August 2016. Firms expect greater marketing and sales efforts, combined with improvements in overall business conditions will lead to output growth in the coming 12 months.

Input costs and average prices charged

Input price inflation rose from May’s 14-month low to its fastest since March. All three monitored sub-sectors registered a rise in input costs, led by the wholesale & retail sector.

Despite increased inflationary pressures, Dubai’s private sector saw a renewed reduction in output charges, following a fractional rise in May. The only sector to buck the overall downward trend was the construction sector. Firms in the wholesale & retail and travel &tourism sector reportedly offered discounts to attract customers in response to intensive competitive conditions. – TradeArabia News Service

Tags: Dubai | retail | Emirates NBD | wholesale | Non-oil private sector |

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