Dubai: Businesses in Dubai had another good run in August in winning orders, but overall activity in the private sector showed signs of growth rates easing from the highs in the first-half of the year. But businesses were clearly not slowing down on the hiring side – with August new job activity rising to the ‘joint-fastest’ rate since November 2015
This was enough to feed the bullish sentiments of business owners, as 'confidence in the 12-month outlook continued to run above the trend seen over the past decade', according to David Owen, Senior Economist at S&P Global Market Intelligence.
"While the expansion in business activity appears to have reached its peak, it is still running well above trend, boosted by strong new order inflows and robust economic conditions."
Other sources also confirm that hiring activity continue to hold up well, with the technology and digital financial services among the most active.
The slower growth in new contracts could also be due to the summer 'recess', with many having put off major project-related announcements until the start of the busy season in September. As such, there was enough happening in the construction space and in the travel/hospitality sectors during July and August.
Less of discounts?
Sure, the retail sector had its share of heavy promotions during August, but elsewhere businesses were easing up on the rate of selling price discounts - at the slowest rate seen since November last. Many opted to pass 'through a stronger rise in input costs to customers'.
There could be more of that happening in the next few months, as entities try to ring-fence any erosion on their margins.
August PMI
Dubai private sector recorded a PMI of 55 last month, down on the 55.7 for July. (The Purchasing Managers Index number denotes level of activity by businesses, based on new capex plans, pricing strategies, contracts won, and hiring. Any score above 50 suggests an expansion mode.)
"Companies feel there is still considerable scope for expansion in a growing market," said Owen. The PMI reading of 55 signals a 'sharp improvement in operating conditions despite being the lowest since February'.
