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Dubai / Agencies
The private sector in the Emirate of Dubai gained momentum by the beginning of Q2 2017 as business conditions improved in key platforms, according to the latest Emirates NBD Dubai Economy Tracker Index.
The index is a composite indicator designed to give an accurate overview of operating conditions in the non-oil private sector economy. The data cited by the index showed that wholesale and retail, travel and tourism and construction remained the best performing sub-sectors monitored by the survey, witnessing the fastest growth rate in 26 months.
The rapid growth reflects the robust resilience of the emirate’s economy and supports its growing focus on infrastructure investments in the build up to Expo 2020 Dubai, according to Khatija Haque Head of MENA research at Emirates NBD. The latest upturn in private sector operating conditions was driven by a steep increase in output, led by wholesale & retail and construction. Furthermore, the rate of growth was the second-sharpest in 26 months (behind January 2017). Survey respondents attributed greater business activity to more favourable economic conditions and new projects.
New business continued to rise for the fourteenth consecutive month in April, which panellists linked to a generally supportive economic backdrop and, in some instances, promotional discounts, and more construction projects. By sector, construction firms reported the strongest upturn in new business.
Reflective of robust improvements in the health of all three key sub-sectors, Dubai private sector companies indicated greater optimism about their prospects for activity growth over the year ahead from March’s seven-month low. Overall, the degree of positive sentiment was broadly in line with the average recorded since the series began in April 2012.
Average cost burdens increased at a modest pace across Dubai’s private sector in April, with the rate of inflation broadly in line with the trend recorded over the current 14-month sequence of rising prices.
Construction and wholesale & retail firms faced increased input costs, whereas travel & tourism noted a fall. In spite of rising costs, average selling prices continued to fall for the ninth month in succession. Furthermore, the rate of decline was faster than the preceding month and modest overall. All three key-sub sectors offered discounts to attract customers amid reports of intensive competition.