At the sector level, travel & tourism was once again the weakest performing category at 51.3 in September, followed by construction (53.8) and wholesale & retail (55.5) respectively.
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.
Khatija Haque, head of Mena Research at Emirates NBD, said: “The headline Dubai Economy Tracker Index (DET) declined to 54.4 in September signalling the slowest rate of expansion since April. Both output and new work increased in September but at a slightly slower rate than in August.”
“However, employment declined on average (49.2) in September, particularly in the travel & tourism sector. Selling prices in Dubai’s private sector declined for the fifth consecutive month, despite a modest rise in input costs. This suggests that firms increased promotional activity and discounts in order to boost demand.
“Stocks of pre-production inventories also rose at the slowest rate since July 2016, indicating less willingness on the part of firms to hold inventories. Firms remain highly optimistic about future output however, with many citing Expo 2020 projects and marketing initiatives as reasons for expected higher output in one year’s time.
“The sector surveys showed continued softness in the travel & tourism sector in September, with this sector index falling to the lowest level year-to-date. Momentum in the wholesale & retail and construction sectors also moderated last month,” Haque added.
• Dubai Economy Tracker Index falls to 54.4 in September, from 55.2 in August
• Employment contracts at survey-record pace amid cost cutting
• Output and new business growth eased during September
Business activity and employment
Output across Dubai’s non-oil private sector increased during September. Although the rate of growth eased since August, it remained sharp overall and above the long-run average. Activity increased to the greatest extent in the wholesale & retail sector.
Employment levels fell for the first time since March, and at the fastest pace since the survey began in January 2010. Some firms linked job shedding to cost cutting. That said, the rate of contraction was only slight.
Incoming new work and business activity expectations
Continuing the sequence of growth recorded since March 2016, inflows of new work increased once again in the latest survey period. That said, the rate of growth eased to a five-month low during September but remained steep overall.
Business confidence across the non-oil private sector remained strongly positive during September. Panellists remained optimistic towards projects surrounding Expo 2020, marketing initiatives and planned business expansion.
Input costs and average prices charged
Average cost burdens continued to rise in September, stretching the current phase of input price inflation to six months. That said, the latest increase in input costs was below the historical average.
Selling prices in Dubai’s non-oil private sector continued to fall amid intense competitive pressures and promotional activity. The degree of price discounting was modest during September, with the latest decrease extending the current sequence of falling output charges to five months. – TradeArabia News Service
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