Dubai:Steep expansions in activity and new business contributed to improvement in Dubai’s business conditions in October, indicating a strong start to the quarter, according to the Emirates NBD Dubai Economy Tracker.
The seasonally adjusted Emirates NBD Dubai Economy Tracker Index — a composite indicator designed to give an overview of operating conditions in the non-oil private sector economy — rose to 55.6 in October, from 55.2 in September. Wholesale and retail was the best performing sector in October, the bank said in an emailed statement.
“The improvement in the Dubai Economy Tracker index is largely on the back of stronger output and new work growth, although intense competition is still pressuring firms’ pricing power and margins. Businesses surveyed were more optimistic at the start of fourth quarter, which is typically ‘high season’ for the travel and tourism sector,” Khatija Haque, Head of MENA Research at Emirates NBD, said in a statement.
As a result, firms continued to hire more staff, continuing the trend that has been in place for the past eight months. Employment growth was the most marked since April.
Sharp increase
According to the tracker, October signalled a sharp increase in incoming new business among non-oil private sector companies operating in Dubai.
Future growth sentiment remained strongly positive in October and hit a 10-month high. The factors those were underpinning business confidence were an expected economic upturn and upcoming new projects related to Expo 2020.
Input cost pressures faced by non-oil private sector firms ticked up in October and hit a 26-month high. The rate of input price inflation was solid overall, albeit below the series long-run average. At the sub-sector level, companies in the construction industry reported the sharpest rates of increase, according to Emirates NBD.
In spite of rising cost pressures, selling prices continued to fall for the second month in a row during October, amid reports of intense market competition. Companies in the travel and tourism and wholesale and retail sectors registered a decrease in output charges, whilst those in the construction sector noted a marginal increase.
