Dubai PMI at post-pandemic high

Daniel Richards - MENA Economist
Published Date: 11 April 2022


Dubai’s PMI ticked up to 55.5 in March, compared with 54.1 in February, marking the strongest reading for the index since the pandemic began, and the highest rate since June 2019. The ongoing relaxation of rules related to the Covid-19 pandemic both at home and abroad, along with the Expo 2020 event, helped stimulate the emirate’s economy. There was a strong expansion across all key sectors, and once again the travel & tourism sector saw a particularly strong expansion. Output across Dubai’s private sector expanded at the fastest pace since July 2019, and with new orders growth also strong (albeit not quite at the pace seen late last year), this will likely be maintained in the coming months.

Dubai PMI

Source: S&P Global, Emirates NBD Research

Price pressures did remain salient in March, with the 14th consecutive month of expansionary 50-plus readings as the war in Ukraine continued to exert upwards pressure on input costs. As has been the trend, however, businesses continued to cut output prices as they cited the competitive nature of the market, albeit at a softer pace than in February.  This margin pressure likely contributed to the ongoing reticence of firms to hire despite the strong growth in business activity; the employment subcomponent was only marginally above the neutral level and was lower than seen in February. Stocks of purchases did expand for the first time since November, however, and business optimism ticked up in March to equal the level seen in December.

Travel & Tourism

Travel & tourism expanded at the fastest pace in nearly three years in March, with firms benefitting from a strong uptick in demand as the Covid-19 pandemic continued to subside and the Expo 2020 event entered its final month. There is some evidence that firms are struggling to cope with this elevated level of demand with current staffing as backlogs of work rose once again, potentially paving the way for a stronger pace of hiring in the coming months – although an ongoing rise in business costs could yet preclude this as firms remain wary of their bottom lines despite strong business optimism.

Wholesale & Retail

One sector where businesses did pass on the cost of their higher input prices to consumers in a more meaningful way was the wholesale & retail sector, where output prices rose for the first time since July 2020. A high level of business optimism – the strongest reading in 11 months – potentially gave firms more confidence to do so even in the highly competitive market that has weighed on output prices to date. New orders expanded at the fastest pace in three months.


The construction sector is bearing the brunt of the inflationary effects of the ongoing pandemic crisis and its impact on supply chains, exacerbated further over the past month or so by the war in Ukraine. Raw materials prices remain elevated, and this has impacted construction businesses in Dubai as they have pared back their purchases. This has had the knock-on effect of pushing up backlogs of work as projects have been delayed. Nevertheless, the sector continues to expand at a robust rate, and output was at the highest level since mid-2019 in March as firms looked to complete outstanding projects.