Dubai: In the first full month after the Expo, businesses in Dubai recorded a sharp rise in activity, helped by new orders. Another plus for these businesses was that while there were raw material price rises, so far they have been on the ‘modest’’ side, according to the latest update from S&P Global’s PMI (Purchasing Managers Index) data.
"The Dubai PMI dropped only slightly from March's 33-month high in April, as businesses indicated that the relaxing of COVID-19 measures continued to have a positive impact on demand,” said David Owen, Economist at S&P Global. ”The upturn was also encouraging considering that the Expo 2020 has now finished and that overall new business growth, including in the travel and tourism industry, remained strong.”
This will be the formula that Dubai will hope to continue right up until peak-summer. Keep the numbers humming with business events and conferences, like this week’s Arabian Travel Market, and sustained demand in the property market.
The April PMI reading was 54.7, down from 55.5 in March, but syll well above the media of 50. The PMI readings provide an indication of businesses placing orders, etc.. “Despite falling for the first time since January, the index signalled a strong improvement in business conditions in the non-oil private sector,” the S&P Global report notes.
Can the momentum last?
Dubai businesses are fairly confident about the near-term. “Expectations of continued rises in sales led to a slightly higher level of optimism for future activity in April, the strongest recorded since last November (which was the second month of the six-month Expo run),” the report notes. ”That said, it remained much weaker than the historical trend.”
Retail sector recorded heightened volumes, with the second-half of April seeing Eid-related buying. "Most noticeable was a sharp acceleration in growth in the wholesale and retail category, whereas upturns in the construction and travel and tourism eased slightly from their post-pandemic highs in March," the S&P Global report adds.
Despite increasing reports of higher material and fuel prices since the outbreak of war in Ukraine, the overall
rise in input costs was again only modest in April. This allowed businesses to offer additional price promotions, as output charges were reduced for the tenth month running