Dubai private sector output rebounds in March
Dubai - March data signalled a solid rebound in business conditions across the Dubai private sector economy, following the slight deterioration recorded during the previous month. This was highlighted by a rise in the seasonally adjusted Emirates NBD Dubai Economy Tracker Index - a composite indicator designed to give an accurate overview of operating conditions in the non-oil private sector economy - to 52.5 in March, up from 48.9 in February. Moreover, the latest reading pointed to the fastest improvement in business conditions since November 2015, largely reflecting renewed output and new order growth alongside a slight acceleration in staff hiring.
A return to growth was recorded across all three key sub-sectors monitored by the survey in March. Travel & tourism was the strongest performing category of activity, followed by wholesale & retail and construction.
The headline Emirates NBD Dubai Economy Tracker Index is derived from individual diffusion indices which measure changes in output, new orders, employment, suppliers' delivery times and stocks of purchased goods.
A reading of below 50.0 indicates that the non-oil private sector economy is generally declining; above 50.0, that it is generally expanding. A reading of 50.0 signals no change.
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, Khatija Haque, Head of MENA Research at Emirates NBD, said:
"The Emirates NBD Dubai Economy Tracker survey for March suggests that after a slow and uncertain start to 2016, activity appears to have picked up at the end of Q1. Output and new order growth across key sectors were solid in March and firms were more optimistic about prospects for the coming year."
Key Findings
- Business activity returns to growth, following modest decline in February
- Robust expansions in all three key sub-sectors, led by travel & tourism
- Private sector firms report most upbeat business outlook since September 2015
Business activity and employment
Private sector companies in Dubai pointed to a robust expansion of business activity during March, with the rate of growth the fastest for four months. Anecdotal evidence suggested that more favourable economic conditions, the launch of new projects and a recovery in clients' willingness to spend had all contributed to the rebound in overall business activity.
Job creation was maintained across the private sector in March, thereby continuing the current period of expansion that began at the start of 2012. Although still subdued in comparison to the long-run survey average, the latest upturn in employment numbers was the fastest since November 2015.
Emirates NBD Dubai Economy Tracker Index™
Seasonally adjusted, 50 = no-change
Sources: Emirates NBD, Markit
Incoming new work and business activity expectations
New work received by private sector companies in Dubai returned to growth in March, signalling a rebound from February's marginal decline. A number of firms cited stronger than expected sales wins, supported by successful marketing and promotional strategies. All three key sub-sectors recorded an upturn in overall new business.
Meanwhile, survey respondents were much more upbeat about the business outlook in March. Around one-third of the survey panel anticipate an upturn in business activity, while only 4% forecast a fall over the year ahead. As a result, business confidence was the highest since September 2015, with firms pointing to hopes of an improvement in underlying economic conditions.
Input costs and average prices charged
Input prices were broadly stable across the private sector in March. However, this masked a divergence across the key sub-sectors; construction and wholesale & retail firms recorded input price pressures, while travel & tourism companies signalled a reduction in their average cost burdens. At the same time, prices charged by Dubai private sector firms dropped for the third month running, which some respondents linked to discounting strategies amid efforts to boost new business volumes in March.
Emirates NBD Dubai Economy Tracker Index: Sector summary
Seasonally adjusted, 50 = no-change
Sources: Emirates NBD, Markit
-Ends-
The next Dubai Economy Tracker Report will be published on 9th May 2016 at 09:15 (DUBAI)
About
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.
The Dubai Economy Tracker Index is a composite index based on five of the individual indexes with the following weights: New Orders - 0.3, Output - 0.25, Employment - 0.2, Suppliers' Delivery Times - 0.15, Stock of Items Purchased - 0.1, with the Delivery Times index inverted so that it moves in a comparable direction. The Dubai Economy Tracker Index is comparable to the UAE Purchasing Managers' Index.
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 31st December 2015, total assets were AED 406.6 Billion, (equivalent to approx. USD 110.7 Billion). The Group has a leading retail banking franchise in the UAE, with more than 220 branches and over 940 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.
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
Hiba Moussa 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: hiba.moussa@bm.com Email: joanna.vickers@markit.com
© Press Release 2016
