Find anything about our articles and more.
Enter a query in the search input above, and results will be displayed as you type.
Try typing "Dubai Economics", "Dubai GDP", "GCC Macro"
Khatija Haque - Head of MENA Research
Published Date: 11 February 2019
The headline Dubai Economy Tracker Index rose to 55.8 in January from 53.7 in December, on the back of a sharp rise in new orders. The new orders index rose to 62.1 last month, the highest reading since June 2018, and the output index rose slightly as well. However, the growth in new work and output was likely due to price discounting, with selling prices declining for the ninth month in a row. The price discounting was particularly evident in the wholesale & retail trade sector.
The employment index rose to 50.3 in January. While this is the highest reading since August last year, it does not signal a real recovery in job creation, with only 1.6% of firms surveyed reporting higher employment in January.
Private sector firms were the most optimistic about their future output than they have been in more than six years, with more than three-quarters of respondents expecting their output to be higher in a year’s time.
In the sector surveys, the wholesale & retail sector saw the sharpest improvement in January, followed by travel & tourism. The construction sector index was broadly unchanged from December 2018.
Source: IHS Markit, Emirates NBD Research
The wholesale & retail sector index recovered to 56.3 in January from 54.2 in December, with both output and new orders rising at a faster rate at the start of 2019. However, demand continued to be underpinned by promotions and price discounting, as the selling price index remained below the neutral 50.0 level. However, the extent of price discounting was less severe than in the prior 3 months.
The employment index was unchanged for the third month in a row, at 50.9, while stocks of purchases grew at the fastest rate since June 2018.
The travel & tourism sector index signalled the fastest growth in the sector since July 2018. However, the index is below where it was in Q1 2018. Both output and new work increased at a faster rate last month, and encouragingly, selling prices were broadly unchanged after declining in each of the prior 6 months.
However, the rise in output and new work was not sufficient to justify new hiring - the employment index fell for the second month in a row to 48.9 in January. However, firms in the sector were more optimistic about their future output than they were in December 2018.
The construction sector index was broadly unchanged in January at 53.8. Although output remained strong, the new work index declined to 53.8, the lowest reading since October 2016 and signalling slower growth in the pipeline of new work, which has been underpinned by Expo 2020 projects over the last couple of years. However, despite this apparent softening in demand, business optimism in the sector rose sharply in January, with 80% of firms in the construction sector expecting their output to be higher in a year’s time.
Employment in the sector rose modestly in January, after declining in December. Input cost inflation was also contained, and selling prices were unchanged after four months of declines.
UAE PMI rises in March
Egypt PMI rises to seven-month high
Dubai Economy Tracker: Stable in February