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Thu 8 Sep 2016 10:49 AM

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Dubai private sector growth 'on track' in August, says Emirates NBD

Economy Tracker Index down slightly from July but uptick in business activity

Dubai private sector growth 'on track' in August, says Emirates NBD

Dubai’s private sector growth held up in August with a strong upturn in business activity and an increase in new orders and output, according to Emirates NBD’s latest tracker.

August data indicated improvement only slightly less marked than the 16-month peak seen in July, the bank said.

At 55.7 points in August, the seasonally adjusted Dubai Economy Tracker Index was down fractionally from 55.9 in July but above the 50.0 ‘no-change threshold’ for the sixth successive month, Emirates NBD said.

It added that the index – a composite indicator designed to give an accurate overview of operating conditions in the non-oil private sector economy – is on track for its highest average reading for any quarter since the start of 2015.

A reading of below 50.0 indicates that the non-oil private sector economy is generally declining; above 50.0, that it is generally expanding. A reading of 50.0 signals no change.

All three key sub-sectors monitored by the survey recorded improving business conditions in August, albeit at a slightly slower pace than in the previous month.

Wholesale & retail performed the best, with an index reading of 55.5, followed by travel & tourism (54.7) and construction (52.6).

The headline index is derived from indicators that measure changes in output, new orders, employment, suppliers’ delivery times and stocks of purchased goods.

Despite an increase in business activity, the latest data indicates only a marginal rise in private sector employment, with the pace of job creation softer than the average since the survey began in 2010.

Khatija Haque, head of MENA research at Emirates NBD, said: “After a strong reading in July, it is unsurprising to see a slightly softer Dubai Economy Tracker index in August.

“Output and new orders still increased sharply last month, partly due to more aggressive price discounting by firms. Businesses also appear to be more optimistic about the coming months, which is encouraging.”