The rate of growth in total non-oil private-sector business activity in Dubai accelerated in May to its strongest pace since 2010, driven by competitive pricing mostly in the construction and wholesale and retail sectors.
The seasonally adjusted Emirates NBD Dubai Economy Tracker Index rose to a four-year high of 58.5 in May from 57.9 in April. The Emirates NBD Dubai Economy Tracker Index is a composite indicator providing an overview of operating conditions in the non-oil private-sector economy. A reading above the 50-mark indicates expansion and below 50 signals decline.
“The rise in output and new work continues to be underpinned by price discounting, as firms reduced their selling prices for the 13th consecutive month,” Khatija Haque, Head of MENA Research at Emirates NBD, said in a statement.
“The earlier start to Ramadan this year may also have contributed to increased activity, particularly in the wholesale and retail trade sector,” she added.
According to the economy tracker index, the record increase in total activity was driven by faster growth in new business. In May, the travel and tourism and wholesale and retail sectors registered sharp increases in new work, and faster intakes of new work contributed to another improvement in 12-month expectations for activity across the non-oil private sector.
Robust business activity did not, however, lead to generating more jobs in the economy. Employment in the non-oil private sector rose only fractionally in May, well below the long-run trend. Though at its strongest since July 2018, the rate of job creation remained much weaker than the long-run trend.
“The growth in the volume of activity and new work is not yet translating into meaningful job creation in Dubai’s private sector, which is the key concern for us,” Haque said.
(Writing by Seban Scaria; Editing by Daniel Luiz)
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