Dubai: Dubai Economy Tracker (DET) data for March signalled an improvement in business conditions across Dubai’s non-oil private sector with sharp growth in both output and new work contributing to the latest expansion.
While the employment slipped into contraction for the first time since February last year, the DET index slipped marginally to 55.3 in March from 55.8 in February.
Growth was recorded across all three monitored sub-sectors in March, led by travel & tourism (56.7), followed by wholesale & retail (56.3) and construction (53.2).
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“While the Dubai Economy Tracker fell to a four-month low of 55.3 in March, it remained firmly in expansionary territory, with travel and tourism the outperformer. That being said, firms continue to make price discounts in order to bolster demand,” said Daniel Richards, MENA Economist at Emirates NBD.
Lower input costs for the first time in over two years will have helped, but squeezed margins appear to be taking their toll on employment, which fell below 50 for the first time since February 2017.
“We anticipate faster growth in the Dubai economy this year, bolstered by ongoing infrastructure projects and greater government spending,” Richards said.
Non-oil private sector firms noted a sharp level of output growth during March, but at a slower rate than that seen in the previous two surveys. According to anecdotal evidence, strong inflows of new orders were linked to rising business activity.
In terms of inflation, average cost burdens faced by non-oil private sector firms fell for the first time since February 2016. Panel respondents frequently reported price discounting at suppliers. That said, the rate of decline was fractional overall. Mirroring the trend seen for input costs, prices charged dropped at a moderate pace in March, thereby ending a three-month sequence of inflation. Businesses in Dubai noted that output charges had been reduced to help stimulate client demand.
