Stock Dubai skyline
Apart from travel and tourism, other systemically vital sectors seem to be managing their sales and staffing requirements better. Image Credit: AFP

Dubai: Dubai’s private businesses are seeing a partial recovery in new jobs being created for a second straight month. It could have been even better, but the travel and tourism sector continues to lag on recovery, according to the February report from the global research firm IHS Markit.

“The overall fall in (February) sales was mind and has so far not deterred firms from increasing output… and employment,” according to David Owen, Economist at IHS Markit. "Employment rose for the first time in 11 months in January - The latest increase in staff numbers was only marginal though.

“However, the near-term outlook could be choppy as cases remain high and other parts of the world continue to restrict activity and travel. Firms in the travel and tourism sector remain wary about their sales opportunities and the prospect of slamming the brakes on efforts to rebuild business capacity.”

Improving job prospects has been mentioned by other industry sources as well, especially in the education and healthcare sectors. Tech and online retailing too remain on solid ground in terms of job numbers.

According to IHS Markit, "Employment rose for the first time in 11 months in January - {But} the latest increase in staff numbers was only marginal though."

Key reading
Dubai’s Purchasing Managers’ Index (PMI) for February was 50.9 and a gain on the 50.6 in January. A reading over 50 suggests that economic activity is in positive territory.

But the “index remained far below its long-run average of 54.6 and pointed to just a marginal upturn overall,” IHS Markit noted.

Pick up elsewhere

But private businesses in Dubai have reported improved activity in February – and extending the gains for a third straight month. The rate of growth is “quickening to a solid pace” since January.

But one worry is that new business orders dropped in February, for the first time since May last year. It could be an outcome of “renewed restrictions on services” that have stymied economic recovery from the pandemic”, according to Owen.

But "The successful roll-out of COVID-19 vaccines in Dubai gave firms' increased optimism for growth in business activity over the coming 12 months," said Owen.

Inflation rears its head
Input cost inflation resumed in February, following a slight decline in operating expenses at the beginning of the year," said the IHS Markit report. "Consequently, the rate of price discounting by businesses in Dubai was the softest since August 2019."