Dubai’s private sector saw a modest rebound in business conditions during November, with output, new orders and employment all expanding at a faster pace than in the previous month, according to a new report.
The headline seasonally adjusted Emirates NBD Dubai Economy Tracker Index of the non-oil economy picked up from 51.9 in October to 53.4 in November.
The latest reading was comfortably above the neutral 50.0 value, but signalled a slower pace of improvement than the average of 55.3 since the series began in 2010.
Business confidence regarding the year-ahead outlook remained positive in November, but the degree of optimism slipped to its lowest since the index began in early-2012.
While survey respondents commented on expectations that market conditions will improve over the next 12 months, in particular helped by projects related to Expo 2020, some also suggested that softer global economic conditions could act as a drag on growth momentum.
Stronger output growth was a key factor boosting the headline index in November, the index showed.
Khatija Haque, head of MENA Research at Emirates NBD, said: “The improvement in operating conditions in Dubai in November, as reflected in the rise in the Dubai Economy Tracker Index, is encouraging.
“Activity in the travel and tourism sector has improved as we head into the ‘high season’ for hospitality, and we expect this trend to continue into Q1 2016.
“The strong growth in output and new work in the construction sector supports our view that investment in infrastructure will continue to contribute to growth in Dubai’s economy, despite sharply lower oil prices.”
Private sector output growth accelerated in November from the 68-month low recorded in October while construction remained the best performing sub-sector, and travel & tourism returned to growth, the survey showed.
It also said that higher levels of business activity encouraged firms to boost their payroll numbers in November. The overall rate of employment growth reached a three-month high, led by a robust pace of hiring among construction companies.
New business levels continued to rise in November, which survey respondents linked to a generally supportive economic backdrop and, in some cases, efforts to stimulate demand through price discounting.
The headline Emirates NBD Dubai Economy Tracker Index is derived from individual diffusion indices which measure changes in output, new orders, employment, suppliers’ delivery times and stocks of purchased goods.
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