Dubai non-oil sector sustains growth in August

Business activity growth ticked up in August but new business improved at its slowest pace in four months.

Dubai's non-oil private sector sustained a better growth rate in August compared with July, latest survey data from Emirates NBD shows.

While travel & tourism and construction sectors saw softer growth, the wholesale and retail trade index was fractionally higher even as overall inflows of new business increased at the slowest pace since April, the Emirates NBD Dubai Economy Tracker Index produced by IHS Markit shows.

According to the findings, business activity growth ticked up but new business improved at its slowest pace in four months.

Khatija Haque, head of Mena research at Emirates NBD, said the headline Dubai Economy Tracker Index (DET) increased marginally in August to 55.2 from 54.9 in July.

"Wholesale & retail was the strongest performer at 56.5 in August, followed by construction [55.3] and travel & tourism [52.9].

"Continuing the sequence of expansion recorded since March 2016, business activity increased. The rate of growth was above the historical average and the sharpest seen in three months," said the survey report.

"Some firms linked improving output to ongoing projects. Job creation softened since July and was only fractional overall. Nonetheless, the increase extended the current sequence of expansion to five months. Firms that reported higher payroll figures linked the rise to higher output requirements," said the report.

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 per cent) reported no change in staffing levels in August, said Haque.

"Producer price pressures eased in August. 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, highlighting the lack of pricing power of firms and the competitive environment," said Haque.

- issacjohn@khaleejtimes.com