Dubai businesses look to December for strong 2023 finish, but job hiring is slowing: S&P Global
COP28 and year-end festivities should help with securing businesses those wins
Dubai: Will COP28 and end-of-year holiday action help Dubai businesses close out 2023 on a high?
October was a blockbuster month for the private sector, while last month saw some softening in business conditions, though not by much, according to the latest PMI (Purchasing Managers Index) from S&P Global. This puts the onus on December to deliver – and deliver big – for the emirate’s non-oil companies.
“The Dubai PMI signalled that demand momentum had come off the accelerator pedal in November, as multiple non-oil sectors recorded a slowdown in new business growth,” said David Owen, Senior Economist at S&P Global Market Intelligence.
“Softness in the demand environment contributed to a steep drop in year-ahead expectations, with firms indicating some concern about how they will perform as market competition toughens.”
Job numbers
Hiring was still taking place during November, but at a slower speed to what was there earlier. That hiring activity has peaked is being repeated by HR managers in various sectors, and businesses say that it could be February before there emerge signs of an improvement.
Prepping for UAE corporate tax
"It's budget making time for 2024, and for UAE businesses, there is also the preparations that need to be made for the new corporate tax," said an audit consultant. "Most companies will be looking to save where possible, which is another reason why new hires are done only on a need-to basis."
Dubai PMI signalled that demand momentum had come off the accelerator pedal in November, as multiple non-oil sectors recorded a slowdown in new business growth
November PMI
Last month’s PMI score – a composite of business spending, orders won, and hiring activity – was 56.8, down on the 57.4 from October. It is also the first drop for the Dubai PMI in 3 months. (Anything over 50 represents business activity in expansion mode, and that’s been the case since September 2020.)
"Metrics such as output and inventories remained strong compared to historical trends, suggesting that firms are still expecting to grow and hence expanded both input buying and output volumes," said Owen.
Businesses wary of heated competition
On new order wins, Dubai businesses reported a busy November - but not the exceptional volumes recorded in October. Sales momentum in the retail, construction, and travel and tourism sectors 'dropped to the weakest since August'.
"Some firms cited increased market competition," S&P Global reports. "The tougher sales environment also took a heavy toll on business projections for the next 12 months, with confidence falling sharply in November to the lowest since April. Again, all three categories were less upbeat than in October, particularly wholesale and retail."
So, can December provide for a return of high confidence for Dubai businesses?