Monday, May 09, 2016

Dubai: Dubai’s private sector economic activity improved further in April with the Emirates NBD Dubai Economy Tracker Index (DET) rising to 52.7 from 52.5 in March and from the series low of 48.9 in February.

The April reading was the highest in five months and signals expansion in Dubai’s non-oil economy. Both output and new work increased at a faster pace in April than in March with the sub-indices at 55.1 and 54.4 respectively. However, jobs growth slowed in April with the employment index easing to 50.8 from 51.8 in March.

The DET survey covers the Dubai non-oil private sector economy, with additional sector data published for travel & tourism, wholesale & retail and construction. All three key sub-sectors monitored by the survey recorded an improvement in business conditions during April, led by wholesale and retail, but the latest reading was still weaker than the long-run survey average 55.1.

Input costs rose at a slightly faster pace in April, but overall producer inflation remains low. Firms continued to cut output prices in April, due to competitive pressure and to secure new work.

“The improvement in the Dubai Economy Tracker in April is encouraging, particularly as it reflects faster new orders and output growth. The latest survey confirms our view that Dubai’s economy is growing in 2016, albeit at a slower rate than last year,” said Khatija Haque, Head of Mena Research at Emirates NBD.

The International Monetary Fund has forecast Dubai GDP to grow slightly better at 3.7 per cent this year compared to 3.6 per cent actual growth in 2015 driven largely by non-oil private sector.

Accelerated expansion of business activity underpinned the latest upturn in operating conditions across the Dubai private sector. Moreover, the overall pace of output growth in April was the steepest since September 2015.

The DET sector indices for construction, and wholesale & retail trade rose in April, while the travel & tourism index was marginally lower than March. All sector indices indicated expansion in April.

After a strong gain in March, the travel & tourism index was just 0.1 point lower in April at 52.2. While new work increased at a faster pace than March (54.4), output growth was slightly slower (53.9) and employment was weaker than March.

Wholesale & retail trade sector activity accelerated in April. “Both output and new orders in the wholesale & retail trade sector grew at a faster rate in April. Firms continued to cut output prices, even as input costs rose, but the extent of output price declines in April was the weakest since the start of the year, suggesting some improvement in demand,” said Haque.

The construction sector index rose 0.7 points last month to 52.7, signalling the fastest rate of expansion in the sector since November 2015. The output and new work sub-indices rose in April, and jobs growth in the construction sector outpaced the average for the whole of Dubai.

By Babu Das Augustine Banking Editor

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