Dubai: Dubai is feeling the full impact of the ‘Expo effect’ – private sector activity in the emirate recorded a strong expansion in October and leading to a demand surge that touched its highest point since March 2020.
Business output too has revved up, now growing at the fastest click since July 2019. These gains are “underlined by a sharp rebound in new orders and increased tourism activity at the start of the Expo 2020,” says the latest update from IHS Markit, the research firm that tracks business activity through the PMI (purchasing managers’ index) measure.
Price pressures remain muted, with a marginal increase in input costs that was the "joint weakest
for eight months". Higher prices for raw materials such as steel led to a slight uptick in purchase costs, but led firms to lower output charges for a fourth straight month.
Still to catch up
Where there is a lag is on new job creation, but “with tourism reviving and capacity pressures growing, this will likely improve in the coming months," said David Owen, Economist at IHS Markit. "Dubai began the fourth quarter of the year in a strong position… Expo 2020 (has) brought increased client demand and tourist numbers. The initial surge in sales contributed to a sharp expansion in activity, suggesting that the economy is well on the way to recovering from the pandemic.”
For October, the PMI reading – which measures orders placed by businesses – for Dubai was 54.5, a marked improvement on the 51.5 in September – and also the “sharpest improvement in business conditions for exactly two years”.
Good news on construction
Construction activity too has perked up, with the HIS Markit report suggesting that the speed of recovery in the sector is building up speed. Travel and tourism was an easy winner, while retail had another good month to follow up on a strong September showing.
