Non-oil private sector economic activity in Dubai reported the slowest rate of expansion in September since April, with the headline Dubai Economy Tracker Index (DET) declining to 54.4 from 55.2 in August.
Selling prices in Dubai’s private sector declined for the fifth consecutive month, despite a modest rise in input costs. This suggests firms increased promotional activity and discounts in order to boost demand.
“The headline Dubai Economy Tracker Index (DET) declined in September signalling the slowest rate of expansion since April. Employment declined on average (49.2) in September, particularly in the travel & tourism sector,” said Khatija Haque, Head of MENA Research at Emirates NBD.
“Growth in visitor numbers has slowed this year, as the strong dollar weighs on demand from key emerging markets such as India and China.”
– Khatija Haque | Head of Mena Research at Emirates NBD
Stocks of pre-production inventories rose at the slowest rate since July 2016, indicating less willingness on the part of firms to hold inventories. Firms remain highly optimistic about future output with many citing Expo 2020 projects and marketing initiatives as reasons for expected higher output in one year’s time.
The sector surveys showed continued softness in the travel & tourism sector in September. The sector index showed the weakest growth in the sector year-to-date, declining to 51.3 in September from 52.9 in August and a 2018-high of 57.3 recorded in May. Output and new work grew more slowly last month and jobs in the sector fell for the second consecutive month, as firms cut costs in a challenging environment. Average selling prices in the sector declined in September, the third month in a row of sub-50 readings.
“Growth in visitor numbers has slowed this year, as the strong dollar weighs on demand from key emerging markets such as India and China,” said Haque.
The total number of international guests in Dubai grew less than half-a-per cent in the year to August, compared with the same period in 2017. In comparison, growth in Jan-Aug 2017 was up 8.2 per cent in the prior year.
The wholesale & retail trade sector index eased slightly to 55.5 in September, but remained firmly in expansion territory, with both output and new orders holding up well. However, the growth in the volume of activity components appears to be driven by steeper price discounting in September. Employment in the wholesale and retail sector declined slightly in September, after being broadly unchanged for most of this year.
The construction sector index slipped to 53.8 in September from 55.3 in August, the lowest reading since March. While output rose sharply, new work growth slowed in September, despite a decline in average selling prices as some firms offered discounts to gain new business. Jobs growth in the construction sector was the softest since March. However, firms in the sector remained highly optimistic about their future output, with the business expectations index rising to a record high in September. Expo 2020 projects were cited as a key reason for optimism in the construction sector.
Source: Gulf News