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Dubai's non-oil economy continued to expand rapidly in October as business activity rose sharply and firms added new jobs on the back of new orders, a business survey released on Wednesday showed.
After reaching a post-pandemic high in August, the headline S&P Global Dubai Purchasing Managers' Index (PMI) dipped for the second consecutive month in October, falling to 56.0 from 56.2 in September. The index was still well above the 50-point mark which indicates expansion in activity.
The survey, which covers the Dubai travel & tourism, wholesale & retail and construction sectors, showed that the slight decline was driven by a fall in the Output sub-index, which indicated a weaker, but still substantial expansion of business activity at the start of the fourth quarter.
"The rate of growth eased to a five-month low but was still one of the strongest seen in the past three years, as firms saw new business volumes increase at a rapid pace. Subsequently, employment levels rose at the fastest rate for nearly three years as firms looked to boost labour capacity and prepare for higher workloads," said David Owen, an economist at S&P Global Market Intelligence.
The higher levels led firms to add jobs at the quickest rate since November 2019, albeit posting in line with the long-run trend. Several firms looked to build their capacity as workloads rose, the report said.
Dubai non-oil businesses saw cost pressures ease for the second time in the past three months which they attributed to the decline to lower oil and transport prices. However, the pace of reduction was only fractional and much softer than the survey record observed in August.
The fall in costs led them to cut their selling prices; to the quickest seen for more than two years, with the wholesale & retail sector registering the sharpest decline. Construction was again the only category to see a rise in output charges.
Looking ahead, business expectations for output over the next 12-month period weakened in October and remained well below the series long-run trend.
(Writing by Brinda Darasha; editing by Seban Scaria)
