Dubai private firms post strong recovery in January
Output levels continued to rise at a sharp pace during last month
Dubai: The latest Purchasing Managers’ Index (PMI) data showed despite supply chain challenges and price pressures, Dubai’s private sector firms continued to see a strong recovery in activity.
Dubai’s non-oil private sector economy expanded at a slower pace in January following December’s 29-month high. The headline PMI decreased for the first time in four months, from 55.3 in December to 52.6 in January. The index was nonetheless above the 50 neutral mark for the fourteenth consecutive month, indicating a solid upturn in business conditions across the non-oil private sector.
Output levels continued to rise at a sharp pace during January, as businesses commented on a further improvement in economic conditions from the pandemic. The expansion was led by another marked upturn in construction output, which was the joint-strongest since mid-2019. At the same time, slower expansions in the wholesale & retail and travel & tourism sectors meant that the overall increase in non-oil activity was slightly weaker than in December.
The latest data indicated only a modest uptick in new orders during January. There was also an additional rise in purchasing prices as supply pressures pushed raw material costs higher, though the pace of inflation eased from a nine-month high in December.
“Despite the slowdown in sales growth, business activity continued to rise at a sharp pace, although this could be further impacted in the coming months if demand does
not recover quickly. Going forward, Dubai businesses expect market conditions to continue to improve as the pandemic hopefully has a more limited impact through 2022,” said David Owen, Economist at IHS Markit .