Dubai: Hiring has picked up significantly in Dubai’s private sector, with new jobs being created at fastest pace since January 2018. But there is still room for more growth on the job side, according to the latest PMI report on Dubai’s businesses during March.
Even then, the activity on hiring mirrors what the wider UAE private sector has been doing in recent weeks helped by new orders and which require adding to the workforce.
As expected, the construction sector is the one hiring actively after a relatively quiet second-half 2022. New projects, especially offplan real estate projects, are what’s driving the sector’s fortunes.
"The increases in staffing levels and inventories of materials and components were the sharpest seen in around five years, allowing firms to increase their output to the greatest extent for six months," said David Owen, Senior Economist at S&P Global Market Intelligence.
New orders prove decisive
Dubai companies had a 'marked improvement' in client demand during March, resulting in an increase in activity that was the 'sharpest since last September'. New business inflows rose sharply, but this was at a rate of expansion down slightly from February. The decline showed up in the wholesale and retail as well as travel and tourism sectors, which have 'lost momentum from their post-Covid peaks in 2022'. In March, retail sales growth was down to a 14-month low.
Higher inflation ahead for contractors?
In the S&P Global survey, Dubai firms reported higher costs on fuel, and contractors will have to worry about spikes in cement and iron, as well as an uptick in staff wages. Even then, the 'overall rise in business expenses was only modest, however, and remained softer than the long-run trend', the report finds.
PMI reading for March
Dubai's Purchasing Managers' Index reading for March is 55.5, which represents a pick up on the 12-month low of 54.1 in February, as 'companies reported greater efforts to build supply-side strength in light of a further rapid expansion in activity levels'. (The PMI reading provides insights into how businesses and spending on hiring and expansion, as well as sentiments of their owners on short-term prospects.)
On their prospects for the next 12 months, business owners' mood was tinged with caution, with only 10 per cent of survey panellists projecting growth in output. The level of positivity was down slightly from February and at its lowest since the start of the year.
"A further slowdown in new business growth shows that demand growth is continuing to weaken from its post-Covid peak," said Owen. "This suggests that rapid activity growth may not be sustained, which was reflecting in a slight drop in future output expectations."