Dubai – Mubasher: The non-oil private sector in Dubai has notably improved in June as business confidence accelerated amid strong pipeline of new projects.

The seasonally adjusted Emirates NBD Dubai Economy Tracker slid to 56.0 in June, from 57.6 in May, according to a recent survey by the UAE-based bank.                                  

The survey indicated that wholesale and retail trade sector was the strongest performer in the sixth month of 2018, recording 58.6, followed by construction and travel and tourism sectors, recording 57.1 and 54.9, respectively.

“Despite the decline in the headline DET index in June, new work and output both increased at a sharp rate, reflecting strong demand,” head of MENA Research at Emirates NBD Khatija Haque commented.

She ascribed the good performance of the emirate's wholesale and retail trade sector in June to Eid al-Fitr's holidays, three-day Muslim festival marks the end of the fasting month of Ramadan.

Haque added that the steep improvement in the construction sector's business conditions “supports our view that infrastructure investment will be an important driver of economic growth this year.” 

Despite business activity growth eased from May’s 40-month high, expansion pace remained sharp overall, the survey noted.

However, the latest improvement has widened the current phase of rising output, which began in March 2016, and many firms have reported strong inflows of new business.

The growth rate of job creation was fractional overall, similar to that recorded in May, the survey said, pointing out that some firms anticipating new projects have hired additional staff, while others have slashed payroll numbers in a bid to cut costs.

However, Dubai’s non-oil private sector expanded in June although the rate of growth softened as compared with in May.

“Business activity expectations improved to the highest since this index began in April 2012 in June. Anecdotal evidence suggested that marketing initiatives, solid business conditions and a strong pipeline of new orders underpinned optimism,” according to the survey.

Moreover, average cost burdens rose at a slower rate, in line with the input price inflation continued for the third consecutive month, making the degree of cost pressure was the weakest in this sequence.