Dubai's non-oil private sector at highest since July on new orders
Employment in the month of October picked up from the previous month to hit a 21-month high
Dubai's non-oil private sector economy expanded in October boosted by growth in sales activity, higher demand and new jobs.
The seasonally adjusted IHS Markit Dubai Purchasing Managers' Index rose for the second time in five months in October to 54.6, from 52.6 the month before. The latest figure indicates a sharp improvement in operating conditions and is the highest since July, according to the survey. A reading above 50 indicates economic expansion and a reading below points to a contraction.
"Business conditions in Dubai strengthened at an accelerating pace ... driving the increase was a notably sharper rise in new work, concentrated on the travel and tourism sector,” said David Owen, an economist at IHS Markit, which complies the index.
Underpinning the rise is a growth in new orders, which improved for the first time in five months, amid higher demand at a number of surveyed companies. Travel and tourism companies expanded, while construction and wholesale and retail firms reported a weaker uplift in sales.
Output volumes increased as businesses took on new work and as a result employment picked up, according to the survey. It was the second successive rise in workforce numbers as the rate of job creation rose to a 21-month high.
An anticipation of larger orders in the future led to Dubai non-oil companies building up their inventories at the start of the final quarter of the year, recording the fastest expansion since April.
Most companies are optimistic regarding the future prospects on expectations that domestic market conditions will stabilise and drive demand higher as will greater activity in the run-up to the Expo 2020, the survey found.
Economic activity in the UAE, the second-biggest Arab economy, is recovering and is likely to gain momentum next year, the International Monetary Fund said earlier this month.
The country’s non-oil economic growth could exceed 1 per cent this year and further accelerate to around 3 per cent in 2020, its fastest pace since 2016, as businesses benefit from the various fiscal stimulus programmes and Dubai’s hosting of Expo 2020. The six month-long event is expected to attract more than 25 million visitors
Updated: November 11, 2019 12:01 PM