Travel and tourism and wholesale and retail perform strongly but construction sector slips to 28-month low
Dubai’s non-oil private sector economy expanded at a fastest rate in nearly a year in March, according to a new business survey.
The seasonally adjusted Emirates NBD Dubai Economy Tracker Index rose from 55.8 in February to 57.6 in March, the highest since May 2018.
Total business activity (output) increased at the fastest rate since January 2015 while two of the three key monitored sectors – travel and tourism and wholesale and retail – posted series record increases in activity.
With new business growth also accelerating, expectations for the next 12 months were the second-strongest on record, just shy of January’s peak, the survey showed.
It added that price discounting, particularly in the wholesale and retail sector, was likely a key driver of demand in March.
The survey said that travel and tourism saw its headline index reach a record high of 59.8, while the headline figure for wholesale and retail was 59.7, just shy of the peak set in October 2017.
In contrast, business conditions at construction firms were the softest in 28 months (51.8), as weaker new order growth weighed on the sector index.
Khatija Haque, head of MENA Research at Emirates NBD, said:
“While the rebound in the headline Dubai Economy Tracker Index is encouraging, it is clear that firms continue to price discount in order to secure new work and boost activity. The pressure to cut costs means that the recovery in the volume of activity has not translated into much job growth in the private sector.”
Total non-oil private sector output increased at the fastest pace since January 2015. The rate of expansion was the fifth-strongest on record since the series began in 2010.
Workforces were expanded to support activity levels in March, although the rate of job creation was modest, the survey noted.
Inflows of new business to private sector non-oil firms in Dubai also rose in March with the rate of expansion being the fastest since May 2018.
Non-oil private sector firms in Dubai cut their prices charged for goods and services for the eleventh month running in March. This marked the longest sequence of discounting since the series began in 2010. The rate of price discounting was the steepest since December 2018.