Dubai’s non-oil business activity sees expansion

September 12, 2023 at 4:14 PM

Dubai’s non-oil private sector saw robust but softer expansion in activity in August compared with the previous month, as growth in demand waned and led to the slowest rise in output since the beginning of the year, a survey showed on Monday.

According to Zawya, the seasonally adjusted S&P Global UAE Purchasing Managers’ Index (PMI) fell for a second month in a row from 55.7 in July to 55 in August, the lowest recorded since February.

The survey covers the Dubai non-oil private sector economy, with additional sector data published for travel & tourism, wholesale & retail and construction. A reading above the 50.0 mark indicates growth in activity.

“While the expansion in business activity appears to have reached its peak, it is still running well above trend, boosted by strong new order inflows and robust economic conditions,” said David Owen, Senior Economist at S&P Global Market Intelligence.

While there was a sharp increase in new work during August, amid reports of higher client demand, increased tourism and ongoing price promotions, “the rate of sales growth nonetheless eased slightly and was the softest since March”, the report said.

Elsewhere, sector data showed a notable slowdown at wholesale & retail companies. Construction activity continued to rise sharply, although new work growth waned, pointing to a weaker picture for the sector’s outlook.

The still strong growth led to firms boosting hiring; the pace of job creation was the joint-quickest in close to eight years.  

“Firms also sought to build their inventories of inputs rapidly, leading to the sharpest accumulation of stock levels for five months.”

Meanwhile, non-oil businesses maintained an upbeat outlook for future activity during August. 

Survey panellists noted that improving economic conditions, increased tourism and strong new work intakes were likely to support activity growth in the coming year. (NewsWire)