Optimism about Business in Dubai at 19- month high in June

Business expectations surged to 82.2 in June from 67.6 in May.

However, input cost inflation rose for the third straight month, even as output prices declined marginally.

Travel & tourism

Activity rose at a faster pace in June, somewhat counterintuitively as the sector heads into the ‘low season’. The output index rose to a robust 55.3 in June, from 54.1 in May and well into growth territory. New work also rose at a faster pace, and this may have helped boost employment in June after two months of relatively modest employment growth. Input costs rose somewhat, but producer inflation in this sector is much more moderate than in the construction sector.

Prices charged were discounted in June, but to a lesser extent than May.

Looking ahead, firms in the travel & tourism sector reported much higher optimism in June, with the expectations index rising sharply to 83.8 from 66.1 in June. This was the highest reading across the three sectors surveyed in June.

Wholesale & retail trade

Activity in the trade sector expanded in June but at a slower pace than May, with the index easing to 54.9 last month. New work growth slowed quite sharply with the index declining to 55.5 from 60.1 in May. Nevertheless, this still signals robust growth in new work. Business expectations improved last month, with this index rising to 77.0 from 59.6 in May. However, the reading was lower than the expectations index for the whole Dubai survey. Input cost inflation was unchanged in June but output prices declined for the fourth consecutive month as competitive pressure remained intense.