PHOTO
Dubai’s non-oil private sector continued to expand in November, but growth in output and new orders softened to their weakest since February, a new survey showed on Tuesday.
The headline S&P Global Dubai Purchasing Managers' Index (PMI) ticked lower for the third successive month in November, dropping to 54.9 from 56.0 in October; albeit well above the 50-mark that separates expansion from contraction. The survey covers the Dubai non-oil private sector economy, with additional sector data published for travel & tourism, wholesale & retail and construction.
Despite easing to the lowest since April, the index was indicative of a robust improvement in the health of the sector, the report said.
"The Dubai non-oil economy enjoyed another robust expansion in November, but there are increasing signs that the latest phase of growth in the emirate has now peaked," said David Owen, an economist at S&P Global Market Intelligence.
Output levels continued to expand sharply, although the rate of growth softened slightly from October to a nine-month low. Business activity mainly rose due to a further increase in new work, with some panellists also mentioning progress on current contracts and the positive impact of sports events such as the FIFA World Cup.
Slowdowns were noticeable in the travel & tourism and wholesale & retail categories, with the former registering the softest rise in new business for over a year.
"While firms continued to enjoy increased demand, the global economic slowdown has begun to limit spending among clients, while some companies found that tight competition continued to make sales growth challenging," said Owen.
The overall rise in new orders led Dubai firms to add to inventory levels, although the upturn was the slowest. Businesses too added jobs in November, but at a slower rate than in October.
Input costs rose marginally, driven by an uptick in fuel prices. However, the panellists noted that this was largely offset by a reduction in supplier charges for raw materials.
Looking ahead, non-oil private firms were increasingly confident of a rise in future output, particularly in the wholesale & retail category. "That said, overall sentiment remained much weaker than the long-run trend," the report noted.
(Writing by Brinda Darasha; editing by Seban Scaria)
