Dubai – Mubasher: Dubai’s non-oil private sector has started the final quarter of 2017 powerfully with expansion and new businesses on the back of the sharp business improvement in October, a recent report showed.
The seasonally adjusted Emirates NBD Dubai Economy Tracker Index rose to 55.6 points in October from 55.2 points in September, with wholesale and retail as the best performing sector in October.
“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,” head of MENA research at Emirates NBD Khatija Haque commented on the Emirates NBD Dubai Economy Tracker.
“Businesses surveyed were more optimistic at the start of Q4, which is typically ‘high season’ for the travel & tourism sector,” Haque added.
Business activity in the private sector’s companies went up in October, showing the improvement of clients’ demand, the report said.
“The rate of growth was sharp overall and broadly in line the average seen throughout 2017 so far,” the report added.
The construction industry was reported as the strongest sector in terms of output expansion for the past two and a half years in October.
Therefore, firms maintained hiring additional staff for the eighth month running as a response to rising output requirements.
Job creation accelerated in general to a solid pace and employment growth was the most marked since April.
Moreover, incoming new business levelled up in October among non-oil private sector companies operating in Dubai, according to the data.
“Anecdotal evidence pointed to strong underlying demand in the domestic market,” the report mentioned.
The wholesale and retail sector recorded the fastest rates of new business expansion during the latest survey period.
“Future growth sentiment remained strongly positive in October and hit a ten-month high,” the report noted, adding that “companies frequently noted that an expected economic upturn and upcoming new projects related to Expo 2020 had underpinned business confidence.
Input cost pressures the non-oil private sector firms faced in October increased, hitting a 26-month high.
“The rate of input price inflation was solid overall, albeit below the series long-run average,” the report alluded.
At the sub-sector level, companies in the construction industry reported the sharpest rates of increase.
Selling prices carried on falling for the second month in a row during October despite the rising cost pressures 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,” the report concluded.