Dubai's non-oil economy expands for first time this year in July
New business orders and output were rising at quicker rates during the month
Dubai: Dubai’s non-oil economy got a boost in July, with numbers showing the first monthly expansion as output and new business orders rose at “quicker rates”.
But employment numbers are still slipping as business retain their focus on cutting down costs.
According to David Owen, Economist at IHS Markit, which issued the findings, "July PMI (purchasing managers index) data signalled the start of a post-COVID-19 recovery. The headline reading of 51.7 pointed to the first month of improvement since February, driven by stronger expansions of activity and new work."
At 51.7, the index was up from 50 in June, indicating modest growth.
Opening up pays dividends
What would most please businesses is the fact that consumer demand "continued to pick up" as lockdown restrictions loosened. And Dubai's opening up to overseas visitors - from July 7 - too is paying off. "In particular, firms found that the reopening of tourist destinations and the resumption of international flights helped to generate additional sales," IHS Markit notes in its latest update.
Productivity gains
Another big positive to emerge from July was the improvement in overall output. The "rate of growth" was faster than in June and the best in the year-to-date.
But it's not all hunky-dory from now on. "Businesses optimism of a rise in activity in the next 12 months weakened in July. Uncertainty around the length of a recovery from the COVID-19 crisis is growing," the report finds.
"Many businesses still expect to recover output by summer 2021 - however, disparity on this appeared to widen."
In July, the outlook among Dubai businesses weakened for the first time since April. Businesses were "generally hopeful of a recovery in output over the coming year. However, some companies predicted that it would take longer than previously thought to recover from the pandemic."
"Job losses eased back from June... but were still solid overall," says IHS Markit in its new report. "Despite the upturn in sales, many firms commented on efforts to lower total costs to relieve pressure on margins, while others cited that cashflow was too weak to maintain current workforce numbers."