Dubai: Dubai businesses recorded ‘another’ strong showing during July, boosted by new contracts and higher output. Another contributing factor was that their raw material and other supply costs remained ‘muted’, adding to business owners’ sentiments that their growth chances will remain on track for the rest of the year as well.
But the July numbers came in lower than the 10-month highs recorded in June. Some degree of cooling off was anticipated, with the three key sectors – construction, wholesale and retail, and travel and tourism – reporting a slower growth in new business compared to June, according to the latest PMI data from S&P Global.
This meant that companies were also slowing down on the hiring part.
Even then, the general mood remains upbeat. “Growth in new order intakes, successful marketing and project wins drove a considerable upturn in output, with nearly a third of businesses seeing a monthly expansion,” said David Owen, Senior Economist at S&P Global Market Intelligence. “The latest data also showed that firms were more confident about the future, supply conditions continued to improve, and price pressures were stable.”
What does the PMI show?
The July PMI (Purchasing Managers Index) number was at 55.7 in July, down on the 10-month high of 56.9 in June. This 'nonetheless indicated a strong upturn in operating conditions across the non-oil economy', S&P Global reports (OMI numbers are based on business output, employment generation, and sentiments among CEOs or owners. Any reading over 50 suggests expansion in business activity.)
"After ticking up to a 10-month high in June, there was nonetheless a cooling of demand growth, with each of the three key sectors monitored - construction, wholesale and retail, and travel and tourism - reporting a weaker rise in new business.
"Similarly, the rate of job creation moderated slightly and was at a 3-month low."
