Business conditions across Dubai’s non-oil private sector improved in March, with sharp growth in output and new work, according to Emirates NBD’s seasonally adjusted Dubai Economy Tracker.
According to the data, non-oil private sector firms noted a sharp level of output in March, albeit at a slower rate than seen in the previous two services.
Emirates NBD said that anecdotal evidence suggests that significant inflows of new orders led to the rising business activity.
The data showed that job shedding returned to the non-oil private sector for the first time in 13 months, following unchanged employment levels in the preceding survey period. The overall rate of contraction, however, was found to be marginal.
New work grew during March, with many firms adopting successful promotional strategies, extending the current sequence of improvement to 25 months.
Additionally, despite falling to a seven-month low, business confidence was found to have remained strong overall, with optimism underpinned by new project wins and expectations of an upturn in economic conditions.
For the first time since February 2016, average cost burdens faced by the non-oil private sector fell, with many respondents reporting price discounting at suppliers. The rate of decline, however, was fractional overall.
Prices charged were also found to have dropped in March, ending a three-month sequence of inflation. According to Emirates NBD, many businesses reported that output charges have been reduced to help stimulate client demand.
“While the Dubai Economy Tracker fell to a four-month low…it remained firmly in expansionary territory, with travel and tourism the outperformer,” said Daniel Richards, MENA economist at Emirates NBD. “That being said, firms continue to make price discounts in order to bolster demand.”
Richards added that squeezed margins appear to be taking their toll on employment.
“Nevertheless, we anticipate faster growth in the Dubai economy this year, bolstered by ongoing infrastructure projects and greater government spending,” he added.
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