Business conditions in Dubai’s non-oil private sector economy maintained a strong pace of improvement in the first month after the Expo 2020 ended, led by a sharp increase in output levels, a survey showed on Friday.  

The seasonally adjusted S&P Global Dubai Purchasing Managers' Index  (PMI) registered at 54.7 in April, down from 55.5 in March, its first drop since January. The indicator stayed above the 50 no-change mark for the 17th consecutive month,

"The Dubai PMI dropped only slightly from March's 33-month high in April, as businesses indicated that the relaxing of COVID-19 measures continued to have a positive impact on demand. The upturn was also encouraging considering that the Expo 2020 has now finished and that overall new business growth, including in the travel & tourism industry, remained strong,” said David Owen, economist at S&P Global.

The Output Index remained strong in April, and despite a slight softening from the previous month, the rate of growth was the second-quickest seen since July 2019. This was due to a sharp rise in customer sales as the economy recovered further from COVID-19 measures, said the survey panelists.

New orders were added at a marked pace during April, only marginally slower than in March. However, as firms saw little need to increase their staffing capacity. In fact, employment numbers dropped for the first time in five months, the report said.

Companies also pointed to an increase in their cost burdens during April, driven by higher raw material and fuel prices in global markets.

"Despite increasing reports of higher material and fuel prices since the outbreak of war in Ukraine, the overall rise in input costs was again only modest in April. This allowed businesses to offer additional price promotions, as output charges were reduced for the tenth month running," said Owen.

Panelists’ outlook for the future was positive led by expectations of continued increases in sales. However, despite the level of optimism for future activity being the strongest recorded since last November, it remained much weaker than the historical trend.

(Reporting by Brinda Darasha; editing by Seban Scaria)