The emirate saw the fastest rise in new work since March 2015, finds Emirates NBD index…
Dubai’s private sector posted stronger growth in June, mainly due to improving business conditions in the travel and tourism and wholesale and retail sectors, according to the monthly Emirates NBD index.
The seasonally adjusted economy tracker index reached its highest level since August 2015 at 54.6, up slightly from 54.5 in May. A reading above 50 indicates that the economy is expanding.
The rise in the index since May was largely driven by a sharp and accelerated expansion of incoming new work, the report said.
Wholesale and retail was the best performing sub-sector in June, followed by travel and tourism. Meanwhile, business conditions in the construction sector business remained stagnant.
Overall private sector business activity continued to expand in June, with the rate of growth unchanged from May’s 14-month high.
Survey respondents noted that improving client spending patterns and competitive pricing strategies had led to rising business activity.
However, staffing levels were broadly unchanged in June, in contrast to rising employment numbers during the past four and a half years.
Some firms noted that uncertainty about the economic outlook had led to more cautious hiring strategies.
Head of MENA Research at Emirates NBD Khatija Haque said: “The improvement in the Dubai economy tracker index in June is underpinned by strong growth in new orders and output. The recovery in the travel and tourism sector last month is particularly encouraging as this sector had been relatively soft in previous months.
“However, we note that the expansion has not led to increased employment, suggesting that firms are becoming more efficient in their operations.”
The report also found that new business volumes increased for the fourth month running in June, with the latest rise the fastest since March 2015.
Looking ahead, private sector firms in Dubai remain optimistic about their prospects for growth over the next 12 months. However, the degree of confidence eased slightly since May and remained below the long-run survey average, the report added.
Aarti Nagraj ; Gulf Business ; 11 July 2016