Dubai: Businesses in Dubai had another strong run in September, with inflationary pressures loosening for a second straight month. Also helping was the drop in fuel prices during this period, according to data from S&P Global.
Dubai's non-oil activity's rate of expansion was 'still the second-fastest for more than three years', with businesses reporting they were able to raise activity due to sharp increases in new business inflows.
This meant the Dubai PMI (Purchasing Managers Index) score was at a quite healthy 56.2, a slight dip on the 57.9 in August, which was a 38-month high. Heading into the final weeks of the year, and with activity picking up in the conference and events space, Dubai businesses could expect a strong closing to the year. Travel and tourism related entities will also have the advantage of the FIFA World Cup in Doha, and how it translates into heavy visitor flows for Dubai as well.
"PMI data for September continued to signal a robust improvement in operating conditions at non-oil businesses in Dubai, thus continuing projections for the strongest quarter of growth for roughly three years,” said David Owen, Economist at S&P Global Market Intelligence.
“That said, the headline index was down from August's recent peak for the first time in five months, as rates of expansion in output, new orders, employment and stocks of purchases softened.” (The PMI score is an indicator of how businesses are faring on multiple counts, including new investments and orders. A reading above 50 shows they are on the right track during the month. The 56.2 for Dubai in September means 'one of the strongest improvements in business conditions since 2019'.
Dubai’s non-oil companies were slow on the hiring side during September, making it the ‘softest recorded’ month since June.
For Dubai businesses, input costs did rise during the month. But it should be in context, with August price drops happening ‘at a record pace’, notes S&P Global. As things stand, “The rate of inflation was the slowest registered in just under a year, amid evidence that weaker global demand had continued to undermine commodity prices and ease cost burdens. The mild increase in expenses also came amid a renewed shortening of input lead times that was the second-quickest since the start of 2021.”
As for construction, while output continued to expand sharply among firms, 'new orders increased only slightly to indicate that sales pipelines may have become less robust', S&P Global finds.