Growth in Dubai's private sector ended the third quarter of 2018 on a weaker footing - survey
Growth in Dubai’s private sector ended the third quarter of 2018 on a weaker footing, with the latest expansion being the slowest since April, according to the latest Emirates NBD Dubai Economy Tracker Index.
A contraction in employment and softer output growth contributed to the loss of impetus although September’s overall improvement in business conditions remained solid overall.
The Emirates NBD Dubai Economy Tracker Index fell to 54.4 in September, down from 55.2 in August.
At the sector level, travel & tourism was once again the weakest performing category at 51.3 in September, followed by construction (53.8) and wholesale & retail (55.5) respectively.
Output across Dubai’s non-oil private sector increased during September. Although the rate of growth eased since August, it remained sharp overall and above the long-run average.
Employment levels fell for the first time since March, and at the fastest pace since the survey began in January 2010. Some firms linked job shedding to cost cutting. That said, the rate of contraction was only slight.
Khatija Haque, head of MENA Research at Emirates NBD, said: “Both output and new work increased in September but at a slightly slower rate than in August. However, employment declined on average (49.2) in September, particularly in the travel & tourism sector.
"Selling prices in Dubai’s private sector declined for the fifth consecutive month, despite a modest rise in input costs. This suggests that firms increased promotional activity and discounts in order to boost demand.
“Stocks of pre-production inventories also rose at the slowest rate since July 2016, indicating less willingness on the part of firms to hold inventories. Firms remain highly optimistic about future output however, with many citing Expo 2020 projects and marketing initiatives as reasons for expected higher output in one year’s time.
“The sector surveys showed continued softness in the travel & tourism sector in September, with this sector index falling to the lowest level year-to-date. Momentum in the wholesale & retail and construction sectors also moderated last month.”