Dubai's non-oil economy grew in January
January data from the seasonally adjusted Emirates NBD Dubai Economy Tracker Index showed a pick-up in growth in the non-oil private sector, particularly in wholesale, retail, travel and tourism.
The indicator – which is designed to give an accurate overview of operating conditions in the non-oil private sector – rose to 56.0 in January, from December’s 14-month low of 54.7. The January reading is the strongest rate of improvement over the course of the last five months.
The best performing sectors were found to be wholesale and retail (index at 56.1), followed by travel and tourism (55.7) and construction (55.2). Any reading above 50.0 indicates growth.
“The rise in the Dubai Economy Tracker Index signals a strong start to 2018, despite the introduction of VAT putting upward pressure on both input and output prices,” said Khatija Haque, head of MENA research at Emirates NBD.
“The construction sector had a particularly strong month in January, and this supports our view that construction will be a key driver of Dubai’s growth this year.”
According to the statistics, non-oil private sector companies reported the fastest growth in business activity since July 2017, with the rate of expansion stronger than the long-run series average. The sharpest increase in output was found to be among construction companies, followed by wholesale and retail.
Job creation in the non-oil private sector was registered for the eleventh consecutive month, at the sharpest rate since November 2015.
Additionally, the volume of new business rose for the 23rd consecutive month, but at the weakest rate of growth since October 2016. The degree of confidence, however, was improved and was the highest since December 2016, particularly in the construction sector.
January signalled a sharp increase in average cost burdens, widely linked by firms to the introduction of VAT. The rate of input price inflation was the highest since October 2011, extending a sequence that has now lasted 23 months.
Lastly, selling prices rose as the fastest pace in three years, with record increases in charges in the wholesale and retail sector.For all the latest business news from the UAE and Gulf countries, follow us on Twitter and Linkedin, like us on Facebook and subscribe to our YouTube page, which is updated daily.