11 October 2015
Dubai's private sector firms continue to experience robust growth in September, but employment levels increase only marginally

Dubai: September data signalled a sustained upturn in output levels within Dubai's private sector economy, helped by growth across all three key sub-categories of activity monitored by the survey.

Overall rates of business activity and new orders growth were, however, softer than those seen on average through the first half of 2015. As a result, private sector companies were more cautious in terms of their staff hiring in September, with the latest expansion of employment numbers the slowest for three-and-a-half years.

Meanwhile, inflationary pressures continued to moderate, with input costs rising at the slowest pace since May and average prices charged were broadly unchanged over the month.

This press release contains the sixth release of data collected from a new monthly survey of business conditions in the Dubai non-oil private sector. Sponsored by Emirates NBD and produced by Markit, the survey provides an early indication of operating conditions in Dubai. The survey covers the Dubai non-oil private sector economy, with additional sector data published for travel & tourism, wholesale & retail and construction.

Commenting on the Emirates NBD Dubai Economy Tracker, Tim Fox, Chief Economist at Emirates NBD, said:
"The slight slowdown in the pace of expansion in Dubai's non-oil economy is consistent with the slowdown across the UAE in September. Overall, the pace of activity remains robust however, particularly in the construction sector. The travel and tourism remains the softest out of the three sectors surveyed, although optimism remains high, and we expect activity to recover as we head into Q4 2015." 

Key Findings
§  Growth of business activity remains faster than July's 40-month low

§  Construction output rises sharply, while the travel & tourism sector experiences only modest growth

§  Job creation sustained in September, but at slowest pace for three-and-a-half years

Business activity and employment

Adjusted for seasonal influences, the Emirates NBD Dubai Business Activity Index posted 56.0 in September, to remain well above the neutral 50.0 threshold. Although the index dipped from 57.6 in August, the latest reading signalled a much faster rate of output expansion than July's 40-month low.  

Of the three key sectors monitored by the survey, construction companies signalled the strongest rise in business activity and the rate of growth accelerated to a four-month high. Wholesale & retail firms also outperformed the all-sector trend in September, with business activity rising at the steepest pace since April. In contrast, latest data indicated only a moderate increase in business activity across the travel & tourism sector.

Emirates NBD Dubai Economy Tracker™

 

Sources: Emirates NBD, Markit

Incoming new work and business activity expectations
Volumes of new work increased at a strong pace in September, with the latest increase only slightly less marked than the five-month high recorded during August. Anecdotal evidence cited rising spending among clients and successful marketing initiatives. In some cases, survey respondents noted that price discounting strategies had been required to attract new work.

Dubai private sector firms are highly optimistic regarding the 12-month business outlook, although the degree of positive sentiment remained slightly weaker than seen on average during the first half of 2015. Travel & tourism companies indicated the most upbeat projections for growth over the year ahead, underpinned by hopes of more supportive economic conditions across the region. Meanwhile, business confidence across the construction sector also exceeded the Dubai whole economy average in September, with some respondents pointing to development work ahead of Expo 2020.

Input costs and average prices charged
Average cost burdens increased at only a modest pace across the Dubai private sector, reflecting relatively subdued raw material price rises and softer salary pressures in September. Moreover, the overall rate of input price inflation eased to its lowest for four months. At the same time, average prices charged by private sector companies were broadly unchanged since August. By sector, rising average prices charged by travel & tourism companies contrasted with continued price discounting by construction firms.

Emirates NBD Dubai Economy Tracker: Sector summary


Sources: Emirates NBD, Markit

-Ends-

The next Dubai Economy Tracker Report will be published on 9th November 2015 at 09:15 (DUBAI)

For further information, please contact:
Ibrahim Sowaidan
Head - Group Corporate Affairs
Emirates NBD
Telephone: +971 4 609 4113 / +971 50 6538937
Email: ibrahims@emiratesnbd.com
Tricia
Rego                                                                               Joanna Vickers
ASDA'A Burson-Marsteller; Dubai, UAE                                  Corporate Communications
Tel: 971-4-4507600;                                                              Markit
Fax: 971-4-4358040                                                              Tel: +44-207-260-2234
Email: tricia.rego@bm.com                                                   Email: joanna.vickers@markit.com
 
Notes to Editors
The Emirates NBD Dubai Economy Tracker™, produced by Markit, is based on data compiled from monthly replies to questionnaires sent to senior executives in approximately 600 private sector companies, which have been carefully selected to accurately represent the true structure of the Dubai economy, including manufacturing, services, construction and retail.

The panel is stratified by Standard Industrial Classification (SIC) group, based on industry contribution to GDP. Survey responses reflect the change, if any, in the current month compared to the previous month based on data collected mid-month.

For each of the indicators the 'Economy Tracker report' shows the 'diffusion' index. This index is the sum of the positive responses plus a half of those responding 'the same'. Diffusion indexes have the properties of leading indicators and are convenient summary measures showing the prevailing direction of change. An index reading above 50 indicates an overall increase in that variable, below 50 an overall decrease.  Markit do not revise underlying survey data after first publication, but seasonal adjustment factors may be revised from time to time as appropriate which will affect the seasonally adjusted data series.

About Emirates NBD
Emirates NBD is a leading banking Group in the region.  As at 30th June 2015, total assets were AED 388.1 Billion, (equivalent to approx. USD 105 Billion). The Group has a leading retail banking franchise in the UAE, with more than 220 branches and over 900 ATMs and CDMs in the UAE and overseas.  It is a major player in the UAE corporate and retail banking arena and has strong Islamic banking, Global Markets & Treasury, Investment Banking, Private Banking, Asset Management and Brokerage operations. 

The Group has operations in the UAE, Egypt, the Kingdom of Saudi Arabia, Singapore, the United Kingdom and representative offices in India, China and Indonesia.

The Group is an active participant and supporter of the UAE's main development initiatives and of the various educational, environmental, cultural, charity and community welfare establishments.

About Markit
Markit is a leading global diversified provider of financial information services. We provide products that enhance transparency, reduce risk and improve operational efficiency. Our customers include banks, hedge funds, asset managers, central banks, regulators, auditors, fund administrators and insurance companies. Founded in 2003, we employ approximately 4,000 people in 11 countries. Markit shares are listed on Nasdaq under the symbol MRKT. For more information, please see www.markit.com.

The intellectual property rights to the Emirates NBD Economy Tracker provided herein are owned by Markit. Any unauthorised use, including but not limited to copying, distributing, transmitting or otherwise of any data appearing is not permitted without Markit's prior consent. Markit shall not have any liability, duty or obligation for or relating to the content or information ("data") contained herein, any errors, inaccuracies, omissions or delays in the data, or for any actions taken in reliance thereon. In no event shall Markit be liable for any special, incidental, or consequential damages, arising out of the use of the data. Markit is a registered trade mark of Markit Group Limited.

© Press Release 2015