Contrary to general sentiments, Dubai’s non-oil private sector did show an uptick in activity during June, according to Emirates NBD Dubai Economy Tracker Index. In fact, the monthly index at 54.6 was at its highest since August 2015, helped along by gains for travel and tourism, wholesale and retail categories.
Wholesale and retail was the best performing sub-sector monitored by the survey in June (headline index at 58.2), followed by travel and tourism (54.1). But, again contrary to popular perceptions the survey pointed to only a modest upturn in construction sector business conditions (51.5).
Improving client spending patterns and competitive pricing strategies had led to rising business activity in June, according to the survey.
But staffing levels did not show any gains commensurate with the increased activity, with some firms noting that “uncertainty about the economic outlook had led to more cautious hiring strategies”.
On the whole, “The improvement in the Dubai Economy Tracker index in June is underpinned by strong growth in new orders and output,” said Khatija Haque, Head of MENA Research at Emirates NBD. “The recovery in the travel and tourism sector last month is particularly encouraging as this sector had been relatively soft in previous months.
“However, we note that the expansion has not led to increased employment, suggesting that firms are becoming more efficient in their operations.”