Dubai private sector growth hits two-year high
* Sharpest rise in output for almost two years in Janury
* New business grew at the fastest rate since March 2015
* Travel and tourism remained the best performing sector
* Job creation continued to be modest
Business conditions in Dubai’s non-oil private sector marked the strongest improvement in nearly two years in January, figures in a survey released on Thursday reveal.
The survey, sponsored by Dubai’s biggest lender Emirates NBD, said the highly positive growth was on the back of faster expansion in output and new orders.
Dubai Economy Tracker Index, which claims to give an accurate overview of operating conditions in the emirate’s private sector economy, touched 57.1 at the start of the year, up from 55.9 registered in December. January’s reading is the fastest rate of improvement in 23 months.
Moreover, all the three key sub-sectors monitored by the survey, travel and tourism, wholesale and retail, and construction, witnessed expansion during the month.
Travel and tourism remained the best performing sector at the start of the year (57.8), closely followed by wholesale and retail (57.7) and construction (55.4), showed the survey, produced by Markit.
The 50-point mark separates growth from contraction.
ALSO READ: New Emiratisation plan for private sector
“The rise in the Dubai Economy Tracker index in January to its highest level in nearly two years was mainly due to faster expansion in output and new orders,” said Khatija Haque, Head of MENA Research at Emirates NBD
“While some of the improvement was attributed to new projects, price discounting is still playing a significant part in supporting demand,” Haque added.
Limited job growth
The latest increase in new business was the fastest since March 2015.
The wholesale and retail sector signalled the strongest rate of activity growth in seven months, with some firms linking the increase to promotional activities to stimulate client demand. Meanwhile, construction firms widely cited new projects as the principal factor behind the increase in output.
Despite the steep increase in business activity, job creation was modest overall, although the pace of staff hiring picked up slightly since December.
Input cost inflation eased since December and pointed to only a marginal rate of increase. Despite sustained cost pressures, private sector companies discounted their output charges for the sixth consecutive month, according to the survey.