Business activity and employment
February data signalled a renewed decline in overall business activity across Dubai’s private sector. Though only modest, it was the first time that activity had fallen since January 2010. Furthermore, all three key sub-sectors noted modest declines in activity during February, led by travel & tourism companies. Anecdotal evidence generally linked reduced business activity to weaker market conditions and fewer new orders.
Dubai private sector companies raised their workforce numbers only slightly in February, as has been the case in each of the past three months. A number of monitored businesses mentioned that staff hiring had been dampened by softer growth in new work.
Incoming new work and business activity expectations
Latest survey data signalled a reduced amount of new business in Dubai’s private sector during February. Though only slight, it was the first time that new orders had declined in just over six years of data collection. Companies that reported lower new business generally commented that an uncertain global economic outlook and falling oil prices had made clients more unwilling to commit to spending. New business fell across all three monitored sub-sectors in February and, in line with the trend for activity, travel & tourism saw the fastest reduction in new work.
Despite a gloomier overall economic picture, Dubai private sector firms expressed an improved level of optimism towards the one-year business outlook in February. That said, the overall degree of positive sentiment remained weak in the context of historical data. At the sub-sector level, business confidence improved across travel & tourism and wholesale & retail.
Input costs and average prices charged
Input prices declined fractionally across Dubai’s private sector economy for the second successive month in February. Meanwhile, prices charged fell at the sharpest rate in the series history amid reports of increased competition for new work. Furthermore, all three key sub-sectors cut their prices in February, with the wholesale & retail noting the steepest rate of discounting.
