Emirates NBD Dubai Economy Tracker
March data signalled an improvement in business conditions across Dubai’s non-oil private sector, with sharp growth in both output and new work contributing to the latest expansion. That said, employment slipped into contraction for the first time since February last year. The seasonally adjusted Emirates NBD Dubai Economy Tracker Index – a composite indicator designed to give an accurate overview of operating conditions in the non-oil private sector economy – was at 55.3, down from 55.8 in February. Scoring well above the neutral 50.0 threshold, the figure indicated a marked expansion that was in line with the historical average, albeit the lowest for three months.
Growth was recorded across all three monitored sub-sectors in March, led by travel & tourism (56.7), followed by wholesale & retail (56.3) and construction (53.2).
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.
The survey covers the Dubai non-oil private sector economy, with additional sector data published for travel & tourism, wholesale & retail and construction.
Commenting on the Emirates NBD Dubai Economy Tracker, Daniel Richards, MENA Economist at Emirates NBD, said:
“While the Dubai Economy Tracker fell to a four-month low of 55.3 in March, it remained firmly in expansionary territory, with travel and tourism the outperformer. That being said, firms continue to make price discounts in order to bolster demand. Lower input costs for the first time in over two years will have helped, but squeezed margins appear to be taking their toll on employment, which fell below 50.0 for the first time since February 2017. Nevertheless, we anticipate faster growth in the Dubai economy this year, bolstered by ongoing infrastructure projects and greater government spending.”
Key Findings
Business conditions improve at marked rate, led by the travel & tourism sector
Output and new work continue to improve at sharp pace
Both input and output prices fall, linked to promotional discounting
Business activity and employment
Non-oil private sector firms noted a sharp level of output growth during March, albeit at a slower rate than that seen in the previous two surveys. According to anecdotal evidence, strong inflows of new orders were linked to rising business activity.
Job shedding returned to the non-oil private sector for the first time in 13 months during March. The finding followed unchanged employment levels in the preceding survey period. The rate of contraction was marginal overall, however.
