Dubai private sector growth picks up pace in May
Dubai’s economic growth has accelerated as the emirate’s private sector saw sustained improvement in business conditions in May on the back of a sharp rise in new work.
Private sector companies based in Dubai showed robust recovery in overall operating conditions for the third consecutive month after experiencing deterioration in February.
The seasonally adjusted Emirates NBD Dubai Economy Tracker Index stood at 54.5 last month, up from 52.7 in April, remaining above the 50-point mark that separates growth from contraction. The headline index, which had hit the survey-record low of 48.9 in February, indicated the steepest improvement in business conditions since August 2015.
Wholesale and retail (56.4) remained the best performing of the three key sub-sectors monitored by the survey in May, closely followed by construction (55.5). Travel and tourism also recorded an overall upturn in business conditions (51.8), but the pace of improvement eased to a three-month low in May.
“The improvement in the Dubai Economy Tracker in May was due mostly to strong growth in output and new work, which is encouraging as it suggests that demand remains robust. Margins are still being squeezed as firms reduce prices to secure new work, but business optimism remains high,” says Khatija Haque, Head of MENA Research at Emirates NBD.
Private sector companies remain upbeat about their growth prospects for the next 12 months and the degree of positive sentiment picked up slightly since April, the survey said. Construction firms were the most optimistic in May, with survey respondents citing new development projects and opportunities related to Expo 2020 in particular.