Dubai’s non-oil sector continues growth on sharp output rise
The non-oil private sector in Dubai continued to grow in December, driven by a sharp output rise amid rising customer demand, according to S&P Global.
The firm’s seasonally adjusted Dubai’s Purchasing Managers’ Index climbed to 55.2 in December, from 54.9 in November, but nonetheless was at its second-lowest since April.
According to S&P Global, readings above the 50-mark show growth, while those below 50 signal contraction.
Even though Dubai’s output growth remained strong in non-oil, it slipped to its weakest since February, the report pointed out.
“Growth in Dubai non-oil activity slipped to its softest rate for ten months in December, but nonetheless remained robust and stronger than the average seen since the survey began in 2010,” said David Owen, an economist at S&P Global Market Intelligence.
He added: “Firms linked the expansion to a sharp upturn in new order inflows and a continued improvement in demand conditions.”
Owen added that Dubai is performing much better than global economic trends for activity and demand.
“This outperformance is also true for inflation, as businesses saw a reduction in input costs for the third time in five months helped by improved supply conditions, compared with marked inflation rates across regions such as US and Europe,” he added.
According to the report, job creation in Dubai slipped to the weakest since September as new business growth remained down in December.
The report further noted that companies in the non-oil sector were less upbeat about future activity levels in December, with positivity slipping to a four-month low.
S&P Global added that an overall fall in input costs encouraged Dubai businesses to offer additional price discounts at the end of the year.
Meanwhile, a PMI report released by S&P Global on Jan. 4 suggested that the growth in the non-oil private sector in the UAE slowed for a second consecutive month in December, while output growth slid to a 15-month low.
According to the report, UAE’s PMI fell to 54.2 in December from 54.4 in November.