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Dubai PMI picks up in December

Daniel Richards - MENA Economist
Published Date: 10 January 2023


Dubai’s S&P Global PMI ticked up in December as it came in at 55.2, up from 54.9 the previous month. Nevertheless, this was the second-lowest reading since April and the fourth quarter was the slowest pace of expansion since Q1. The slowing in momentum in Q4 is consistent with that seen in national PMIs in the GCC. 

Dubai PMI rises in December

Source: S&P Global, Emirates NBD Research

Output for Dubai private sector firms in December – while still very strong - was at the lowest level in 10 months. The slowing activity is in line with our expectations that growth in the private sector would moderate through the end of the year, but the expansion rate remains robust as compared with most PMI surveys from around the world. Over 2022 as a whole the Dubai survey averaged the strongest pace of expansion since pre-pandemic 2019, chiming with our estimate of real GDP growth of 5.0% over last year.

This year we forecast that real GDP growth in Dubai will slow to 3.5% to 4.0%, as the open, services-based economy is not immune to the global slowdown and its implications for trade volumes and tourism.  Business expectations remained subdued and declined to a four-month low in the December survey, although respondents did cite some positivity around falling input prices which turned negative once again, albeit marginally. This gave businesses room to deepen their price cutting to customers as they looked to maintain competitiveness. Positively for the coming months, new orders ticked up in December but were still at the second lowest level since April. Employment grew for the eighth month running.

Travel & tourism

The travel & tourism subcomponent was the weakest of the three individual sectors covered by the survey as the index ticked up two basis points in December to 53.4 but remained lower than the 2022 average. Input prices rose only modestly which enabled businesses to cut their prices by the steepest level since August. Employment was broadly unchanged as business optimism fell to the weakest level since March, despite an uptick in new orders. Dubai welcomed 12.8mn overnight visitors over January to November, more than double the number seen in 2021 but still 14.7% off pre-pandemic 2019 visitors. The reopening of China should provide a fillip to the sector, although this will be offset by the impact of a global slowdown on visitors from other countries.

Wholesale & retail

The wholesale & retail sector index eased to 55.3 in December, from 55.5 in November, marking the slowest pace of expansion since March. Business continued to cut prices sharply, aided by falling input prices, which has helped underpin growth in output which remained robust, albeit slower than seen the previous month. Business expectations declined from November’s levels but remained stronger than the average over 2022.


The construction sector was the strongest performing in December as the headline reading rose to 55.4, from 53.2 in November. Positively, new work grew at the strongest pace since February 2021, following several months of lacklustre growth. Input prices were negative after ticking up modestly in November, which enabled firms to cut their selling prices for the first time since July, albeit marginally. Business expectations rose to a three-month high.