A return to growth was recorded across all three key sub-sectors monitored by the survey of Emirates NBD in March. Travel & tourism was the strongest performing category of activity, followed by wholesale & retail and construction.
The headline Emirates NBD Dubai Economy Tracker Index is derived from individual diffusion indices which measure changes in output, new orders, employment, suppliers’ delivery times and stocks of purchased goods.
A reading of below 50.0 indicates that the non-oil private sector economy is generally declining; above 50.0, that it is generally expanding. A reading of 50.0 signals no change.
The survey covers the Dubai non-oil private sector economy, with additional sector data published for travel & tourism, wholesale & retail and construction.
Commenting on the Emirates NBD Dubai Economy Tracker, Khatija Haque, Head of MENA Research at Emirates NBD, said, “The Emirates NBD Dubai Economy Tracker survey for March suggests that after a slow and uncertain start to 2016, activity appears to have picked up at the end of Q1. Output and new order growth across key sectors were solid in March and firms were more optimistic about prospects for the coming year.”
Key Findings
- Business activity returns to growth, following modest decline in February
- Robust expansions in all three key sub-sectors, led by travel & tourism
- Private sector firms report most upbeat business outlook since September 2015
Business activity and employment
Private sector companies in Dubai pointed to a robust expansion of business activity during March, with the rate of growth the fastest for four months. Anecdotal evidence suggested that more favourable economic conditions, the launch of new projects and a recovery in clients’ willingness to spend had all contributed to the rebound in overall business activity.
Job creation was maintained across the private sector in March, thereby continuing the current period of expansion that began at the start of 2012. Although still subdued in comparison to the long-run survey average, the latest upturn in employment numbers was the fastest since November 2015.
Incoming new work and business activity expectations
New work received by private sector companies in Dubai returned to growth in March, signalling a rebound from February’s marginal decline. A number of firms cited stronger than expected sales wins, supported by successful marketing and promotional strategies. All three key sub-sectors recorded an upturn in overall new business.
Meanwhile, survey respondents were much more upbeat about the business outlook in March. Around one-third of the survey panel anticipate an upturn in business activity, while only four per cent forecast a fall over the year ahead. As a result, business confidence was the highest since September 2015, with firms pointing to hopes of an improvement in underlying economic conditions.
Input costs and average prices charged
Input prices were broadly stable across the private sector in March. However, this masked a divergence across the key sub-sectors; construction and wholesale & retail firms recorded input price pressures, while travel & tourism companies signalled a reduction in their average cost burdens. At the same time, prices charged by Dubai private sector firms dropped for the third month running, which some respondents linked to discounting strategies amid efforts to boost new business volumes in March.
