Dubai’s non-oil private sector continued to grow at the same pace in August from the previous month, on the back of higher output, new orders, however the pace of job creation was marginal, according to Emirates NBD Dubai Economy Tracker Index.
“The Dubai Economy Tracker survey shows continued expansion of the economy last month, at a similar rate to June and July,” said Khatija Haque, head of Mena research at Emirates NBD. “Output and new orders have increased sharply, although this has not translated into significant jobs growth.”
The composite index for August, a key measure of the emirate’s non-oil economic health, remained unchanged at 56.3. A reading above 50 indicates general expansion.
The rate of inflation weighed on input prices, which rose for the eighteenth consecutive month. Costs for raw materials increased based on an uptick in demand, while greater cost burdens were recorded across all three sub-sectors covered in the survey. Inflation also hit output charges, though marginally. Last month was the second increase in output prices in 13 months, with the travel and tourism sector offsetting reductions from construction and wholesale and retail sectors.
Business activity and inflows of new work softened last month compared to July, while business optimism recorded the strongest levels since May. There are new orders in the pipeline as well as further improvements in market demand conditions, according to panellists.
This falls in line with the market sentiment shown in Emirates NBD purchasing managers’ index (PMI) survey released last week.
A three-year lull in oil prices has led to an economic downturn impacting some industries more than others. However, Dubai’s economic diversification has enabled it to weather the reverberations of declining oil revenues. Survey respondents indicated positive business sentiment thanks to growing trade, tourism as well as infrastructure spending ahead of Expo2020.