April data signalled a slowdown in non-oil private sector growth, with the latest improvement in business conditions being the smallest since October 2016.
Weaker momentum in the wholesale and retail and travel and tourism sectors was a key factor behind the overall slowdown. The seasonally adjusted Emirates NBD Dubai Economy Tracker Index, a composite indicator designed to give an accurate overview of operating conditions in the non-oil private sector economy, scored 53.9 in April, down from 55.3 in March. Nonetheless, the figure was indicative of a modest overall expansion.
Despite easing since the preceding survey period, travel and tourism remained the strongest performer (55.3), followed by construction (54.9) and wholesale and retail (53.5).
A reading of below 50.0 indicates that the non-oil private sector economy is generally declining; above 50.0, that it is generally expanding. A reading of 50.0 signals no change.
The survey covers the Dubai non-oil private sector economy, with additional sector data published for travel & tourism, wholesale & retail and construction.
“The softer Economy Tracker Index in April appears to reflect weaker inventory accumulation as well as slower output and new work growth. However, demand still appears to be relatively robust,” said Khatija Haque, Head of MENA Research at Emirates NBD.
Overall business activity growth in Dubai’s non-oil private sector increased at a slower rate in April. The pace of expansion fell below the historical series average but remained solid overall. Many firms linked higher output to strong demand conditions.
Despite easing output growth being registered in April, panellists reported a return to job creation for the first time since January. That said, the rate of employment growth was only marginal overall.
New business volumes continued to increase at a solid rate during the latest survey period. Some firms linked higher new orders to robust demand conditions and promotional activity. That said, the rate of growth eased to the lowest in a year-and-a-half in April.
Businesses continued to forecast an improvement in output levels over the next 12 months. In fact, the overall degree of positive sentiment reached a three-month high in April and scored above the historical average. According to anecdotal evidence, new project wins and an expected economic upturn underpinned business confidence in the most recent survey.
Input price inflation returned to Dubai’s non-oil private sector during April, following a marginal fall in average cost burdens in March. Prices increased at a solid rate overall, registering above the historical average. Firms noted higher wages alongside greater raw material costs.
Businesses raised their output charges during the latest survey, reflecting the increase in input costs, according to anecdotal evidence. That said, the rate of inflation was only fractional overall.