Despite the slow pace of growth, firms in Dubai reported being optimistic that their output will be higher in a year's time
The rate of growth of Dubai’s non-oil private sector has slowed to a 31-month low due to slower improvements in activity and new work and a contraction in employment, according to Emirates NBD’s seasonally-adjusted Economy Tracker Index.
According to the data, output across the non-oil sector was the slowest since December 2017, with the travel and tourism sector seeing the weakest improvements during the survey period.
“Both output and new orders across the whole of Dubai’s private sector increased in October, but at markedly slower rates,” said Khatija Haque, head of MENA research at Emirates NBD. “Output growth was the weakest year-to-date, while new order growth was the slowest since April 2016.”
Haque added that the more firms reported a decline in headcount than an increase, with many firms citing cost cutting as a reason behind job shredding.
“However, the vast majority of firms surveyed reported no change in job numbers in October,” Haque added.
Businesses reported an increase in new work during October, extending the current growth phase to 32 months. The latest expansion, however, was the weakest in two-and-a-half years and remained below the historical average.
Cost burdens in Dubai’s non-oil private sector increased for a seventh month in a row, while output charges fell again, which many firms linking the lower selling prices to promotional activity.
“Despite the soft survey data, firms in Dubai were the most optimistic than they have been since at least 2012, with nearly 77 percent of respondents expecting their output to be higher in a year’s time,” Haque added.