STOCK Dubai Skyline Sheikh Zayed road
Dubai businesses have been helped by lower inflation-linked costs, while their output too keep making steady gains Image Credit: Virendra Saklani/Gulf News

Dubai: Businesses in Dubai recorded a slowing in momentum and on their new hiring in December – but there was one major positive still. Across the private sector, companies were benefitted from lower cost of operations, including fuel- and transportation expenses, according to the latest PMI data from S&P Global.

On the job side, hiring slipped to lowest rate of growth since September last. On overall growth, December was slower than those recorded earlier in the year.

"The latest results suggest that whilst the post-pandemic bounce in the non-oil sector is continuing to wane from its peak in August, the emirate is performing much better than global economic trends for activity and demand,” said David Owen, Economist at S&P Global Market Intelligence. “This outperformance is also true for inflation, as businesses saw a reduction in input costs for the third time in five months helped by improved supply conditions, compared with marked inflation rates across regions such as USA and Europe."

Who's been hiring in Dubai?
Weaker output forecasts fed through to a softer rise in employment numbers, as staffing grew only slightly and to the smallest extent since September, according to S&P Global. "By sector, jobs growth was mainly driven by the construction and wholesale and retail categories, whereas staffing was broadly unchanged in travel and tourism."

December PMI

The Purchasing Managers Index reading for the final month of 2022 was showing 55.2 – and that’s quite a healthy one. In fact, it improved on November’s 54.9 (The PMI gives a score of how businesses are faring in terms of new orders won, their cost of operations, and how they are doing on the job creation side. Anything above 50 shows businesses are in expansion mode.)

And yet, there are concerns. "Growth in Dubai non-oil activity slipped to its softest rate for 10 months in December, but nonetheless remained robust and stronger than the average seen since the survey began in 2010," said Owen. "Firms linked the expansion to a sharp upturn in new order inflows and a continued improvement in demand conditions."

Firms were less upbeat about future activity levels in December, with positivity slipping to a four-month low

- S&P Global

Business expenses

Across December, input prices dipped for a third time in five months, indicating 'softer inflationary pressures than seen earlier in the year'. Businesses reported that improved input availability helped reduce pressure on prices. (But input costs continued to increase for travel and tourism companies.)

"The overall fall in input costs encouraged Dubai businesses to offer additional price discounts at the end of the year," the report adds. "Output charges decreased for the fifth month running, and at a solid pace that was the faster than in November."