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Khatija Haque - Head of MENA Research
Published Date: 09 September 2018
The headline Dubai Economy Tracker Index (DET) increased marginally in August to 55.2 from 54.9 in July. Output rose at a faster rate than in July, driven by ongoing projects, but new order growth slowed modestly last month. The employment index eased to 50.4 in August, only slightly above the ‘no change’ level. The vast majority of firms surveyed (94%) reported no change in staffing levels in August.
Producer price pressures eased in August, with the input cost index falling to just 51.0 from nearly 54 in July. However, average selling prices declined a fraction with some firms citing promotional activity. The selling price index has been in contraction territory for the last four months running, highlighting the lack of pricing power of firms and the competitive market environment.
The average DET year to date is 55.6, only slightly lower than the same period last year (56.5). This suggests to us that Dubai’s economy is probably growing a similar rate to 2017, or a touch slower. Preliminary estimates from the Dubai Statistics Centre put last year’s GDP growth at 2.8%; about half a percentage point slower than our forecast for 2018. While this may seems a little optimistic right now, we do expect a modest acceleration in growth in the final quarter of this year.
Source: IHS Markit, Emirates NBD Research
Dubai PMI: Slowest quarter since Q1 2016