By Sarah Townsend
Travel and tourism plays a major role in boosting economy, says Emirates NBD’s latest tracker
Business conditions in Dubai’s non-oil private sector recorded their fastest rate of improvement in 23 months, according to the latest tracker from Emirates NBD.
The seasonally adjusted Emirates NBD Dubai Economy Tracker index registered 57.1 in January, up from 55.9 to signal the strongest improvement in almost two years.
The index, a composite indicator designed to give an overview of operating conditions in the non-oil private sector economy, was boosted largely by the travel and tourism sector – which remained the best performing category at the start of the year at 57.8.
It was closely followed by wholesale & retail (57.7) and construction (55.4) – meaning all these three key sub-sectors monitored by the survey recorded “marked rates of expansion”, Emirates NBD said.
The indicators pointed to the sharpest rise in business output for almost two years. January data signalled greater amounts of new work for the eleventh month in succession.
The bank also found that firms continue to discount output prices despite further increase in input costs.
Khatija Haque, head of MENA research at Emirates NBD, said: “The rise in the Dubai Economy Tracker index in January to its highest level in nearly two years was mainly due to faster expansion in output and new orders.
“While some of the improvement was attributed to new projects, price discounting is still playing a significant part in supporting demand.”
However, despite the steep increase in business activity, job creation was modest overall, although the pace of staff hiring has picked up slightly since December.
Companies remained optimistic about prospects for growth in business activity over the next year, and pointed to improving market conditions, Emirates NBD added.
The index is derived from individual indices measuring changes in output, new orders, employment, suppliers’ delivery times and stocks of purchased goods.
A reading of below 50.0 indicates that the non-oil private sector economy is generally declining; above 50.0 it is generally expanding. A reading of 50.0 signals no change.