Stock - UAE Economy
Retail has been an immediate beneficiary from the return of business confidence, and so has the travel sector as visitors make a swift return to Dubai. Image Credit: Virendra Saklani/Gulf News

Dubai: Ahead of the Expo opening, confidence levels among businesses in Dubai recorded a visible improvement, with travel and tourism and retail sectors leading the way. But the construction sector lagged with new projects taking a dip, according to the latest monthly updates from IHS Markit, the consultancy that tracks PMI (Purchasing Managers Index).

The PMI score – which tracks how private businesses are doing – for September was 51.5 and ensuring the highest three-month average since the end of 2019. The score could have been better were it not for new orders slipping last month – and for the first time since February.

Yet, “Firms were largely unconcerned about the setback for order books in September, with the expansion in output remaining sharp and close to August’s two-year high,” said David Owen, Analyst at IHS Markit. “The Expo 2020 has now begun, which should drive increased sales in the services sector over the next six months at least.

“Whilst IHS Markit predicts that the direct growth impact from the event will be modest, the latest PMI data highlighted a considerable impact on near-term business confidence."

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Adding to job numbers

Dubai-based firms are hiring, gradually. Much depends on their order books going forward. The employment gains in September were up marginally, the slowest in four months.

Some cause for concern

Stocks of raw materials fell "slightly" last moth, as "firms held on to fewer inputs as demand softened," the report adds. "Suppliers’ delivery times lengthened again, as has been the case in each month since February. Supply chains remained under pressure amid global transport issues and business capacity constraints."