Dubai non-oil private sector growth gains momentum

DUBAI / Emirates Business

The improvements in the overall business conditions in Dubai’s non-oil private sector gathered steam in June, with the seasonally adjusted Emirates NBD Dubai Economy Tracker Index – a composite indicator designed to give an accurate overview of operating conditions in the non-oil private sector economy – registering 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 the best performing category, closely followed by construction (index at 57.4). The travel & tourism sector (54.4) experienced the slowest improvement in business conditions. The survey covers the Dubai non-oil private sector economy, with additional sector data published for travel & tourism, wholesale & retail and construction.
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.”
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.
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.
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.