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Khatija Haque - Head of Research & Chief Economist
Published Date: 09 May 2018
The headline Dubai Economy Tracker Index (DET) declined to 53.9 in April from 55.3 in March and from a 2018-high of 56.0 in January. Both output (57.1) and new work (58.0) increased sharply last month but at a slower rate than in previous months. In particular, the new work index was the lowest since October 2016. In this context, it was unsurprising to see pre-production inventories rising at the slowest rate since July 2016.
The employment index signalled a marginal increase in jobs last month, with the index at 50.3, up from 49.7 in March. The majority of firms surveyed signalled no change in employment in April, however. Staff costs also rose last month, with this contributing to sharply higher input costs overall in April.
The input cost index rose to 54.3, the highest reading since January, when VAT pushed the index up to 59.2. Selling prices were largely unchanged however, with the output price index rising to 50.2, only just above the neutral level despite the much higher input price inflation.
Businesses were more optimistic in April despite the weaker new order growth and higher production costs faced by firms. More than half of all firms surveyed expected their output to be higher in 12 months’ time, while only 4.5% expected a decline.
Source: IHS Markit, Emirates NBD Research
Sector survey hightlights:
Job losses weigh on regional PMIs
GCC PMIs improve in July
Dubai economy stabilises in June