Dubai’s non-oil private sector economy slowed in December, recording the weakest growth in business activity since April 2016, however the overall business activity and new work remained sharp in the emirate, according to a new survey.
The Emirates NBD Dubai Economy Tracker Index, an indicator designed to give an overview of non-oil private sector economy, eased to 54.7 in December, from 55.3 in November. A reading above 50 suggests that the non-oil economy is growing, while a reading below 50 suggests a contraction. The survey is sponsored by Emirates NBD, Dubai’s biggest bank by assets, and produced by IHS Markit, a financial information services company.
"The decline in the Dubai Economy Tracker index in December is a little surprising, but appears to be broad-based across all the key sectors. Nevertheless, a reading of 54.7 still indicates economic growth in December," said Khatija Haque, the head of Mena research at Emirates NBD. "Looking at 2017 as a whole, the survey data suggests that Dubai's economy grew at a faster rate than both 2015 and 2016."
The wholesale and retail index at 54.9 was the best performing segment of the emirate's economy in December, closely followed by construction at 53.5. However, the travel and tourism sector at 51.2 experienced the slowest improvement in business conditions last month, the survey reported.
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The rate of expansion remained sharp overall in the last month of 2017, with construction companies noting the steepest increase in output growth. Job creation continued for the 10th month running during November. However, the rate of hiring eased - the weakest reported since June. The survey said anecdotal evidence indicated that firms had increased payroll numbers to meet rising output requirements.
Continuing the sequence seen since March 2016, volumes of new orders increased during December, but the rate of growth softened to a seven-month low amid reports of easing domestic demand.
The purchasing managers polled were confident about the overall prospects of the economy and the degree of confidence has improved since November to levels above the survey’s long-run average. Selling prices in Dubai’s non-oil private sector also rose during December, ending a three-month sequence of price discounting.
