Sept upturn in Dubai’s private sector economy

|By TAP Staff| September data from Emirates NBD Dubai Economy Tracker signaled a sustained upturn in output levels within Dubai’s private sector economy, helped by growth across all three key sub-categories of activity monitored by the survey.

Overall rates of business activity and new orders growth were, however, softer than those seen on average through the first half of 2015. As a result, private sector companies were more cautious in terms of their staff hiring in September, with the latest expansion of employment numbers the slowest for three-and-a-half years.

Meanwhile, inflationary pressures continued to moderate, with input costs rising at the slowest pace since May and average prices charged were broadly unchanged over the month.

Tim Fox, Chief Economist at Emirates NBD, pointed out that the slight slowdown in the pace of expansion in Dubai’s non-oil economy is consistent with the slowdown across the UAE in September. “Overall, the pace of activity remains robust however, particularly in the construction sector. The travel and tourism remains the softest out of the three sectors surveyed, although optimism remains high, and we expect activity to recover as we head into Q4 2015,”  he said.

Adjusted for seasonal influences, the Emirates NBD Dubai Business Activity Index posted 56.0 in September, to remain well above the neutral 50.0 threshold. Although the index dipped from 57.6 in August, the latest reading signalled a much faster rate of output expansion than July’s 40-month low.

Of the three key sectors monitored by the survey, construction companies signalled the strongest rise in business activity and the rate of growth accelerated to a four-month high. Wholesale & retail firms also outperformed the all-sector trend in September, with business activity rising at the steepest pace since April. In contrast, latest data indicated only a moderate increase in business activity across the travel & tourism sector.