The performance of Dubai’s non-oil private sector improved in June, with business confidence surging and a strong pipeline of new projects and work outstanding, according to new figures from Emirates NBD.
In its seasonally adjusted Dubai Economy Tracker Index, which is designed to give an accurate overview of operating conditions in the non-oil private sector economy, Emirates NBD found that the wholesale and retail sector was the strongest performer in June, followed by construction and travel and tourism.
Although business activity was found to have softened from May’s 40-month high, the pace of expansion was found to have remained sharp. Anecdotal evidence from firms suggested that favourable business conditions and inflows of new work are behind higher business activity throughout the course of the month.
Job creation, however, was found to have remained subdued in the latest survey, with a fractional rate of growth that matched that recorded in May. According to Emirates NBD, some firms reported hiring additional staff in anticipation of new projects, although these were negated by those that reduced payroll numbers to cut costs.
“Despite the decline in the headline DET index in June, new work and output both increased at a sharp rate, reflecting strong demand,” said Khatija Haque, head of MENA research at Emirates NBD. “The wholesale and retail trade sector performed particularly well last month, which may have been partly due to the Eid holidays.”
Haque added that the “sharp improvement in business conditions in the construction sector supports our view that infrastructure investment will be an important driver of economic growth this year.”
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