Dubai: The pace of new job creation in Dubai’s retail, construction and services sectors dropped to a five-month low in February, as businesses reacted to slower growth in new orders. There was also pressure on pricing for businesses, according to the latest PMI data from S&P Global.
In fact, the February Purchasing Managers Index – a measure of business activity based on new orders, expansion plans, etc. – was at its lowest rate in 12 months brought on by the ‘waning new order expansion’. But the mood among business owners is still upbeat.
"Businesses were also more optimistic towards future output in February, reflecting confidence that demand conditions will continue to improve and avoid disruption from a weaker global economic climate,” said David Owen, Senior Economist at S&P Global Market Intelligence. “Firms saw supplier delivery times improve sharply, with this index picking up to its highest level in three-and-a-half years."
The PMI for February was still at a solid 54.1, well above the 50 median. But it’s still a drop compared to January 2023’s 54.5.
Business mood is upbeat
Firms in Dubai are broadly 'more confident' about future activity. "The degree of optimism towards the next 12 months reached its highest level since last June, as firms widely cited expectations that improving market conditions will support higher activity," the S&P Global statement said.
According to Owen, "The (February PMI) reading was still indicative of a robust performance for the non-oil sector."
Where the February numbers lagged was on new orders booked by these businesses. They rose, but to the 'least extent' since early 2022. "While many companies continued to see demand increase, others reported that competitive pressures had weighed on sales," the report added. "Subsequently, non-oil companies registered slower increases in both employment and inventories during February.
"Job creation was only mild overall and the softest seen for five months, whilst stock levels grew to the least extent in the present seven-month run of expansion."