Dubai’s private sector economy expands in March

Dubai’s non-oil private sector economy expanded in March with output, new orders, employment and stocks of purchases growing at a faster pace than the preceding month, Emirates NBD said in a report on Monday.

The Emirates NBD Economy Tracker Index rose to 56.6 in March from 56.2 in February.  Inventories also increased at a faster rate last month, the bank said. 

The index for first quarter this year averaged 56.7, indicating the fastest rate of growth in Dubai’s non-oil private sector since Q1 2015.

“The March data is consistent with sharp improvements in business conditions across Dubai’s non-oil private sector economy,” Tim Fox, chief economist at Emirates NBD, said in a statement.

Employment saw slight growth in March, with the sub-index rising to 50.7 in March from 49.9 in February.  Overall, employment growth has been slow in Q1 2017, with this index averaging just 50.6, compared with 53.4 in Q1 2015.     

Margins remained under pressure, with input costs rising at a slightly faster rate in March (51.8) while output prices declined on average (48.7). 

Despite the rise in the headline index, business optimism eased to the lowest level since August 2016 with only 30 percent of firms expecting output to be higher over the next 12 months compared with nearly 47 percent of firms in February. 

The wholesale and retail trade sector was again the best performing of the three key sectors surveyed last month, the bank said.  The sector index eased from the record high in February, “but still indicates a strong rate of growth in the sector at 57.1,” it said.

The travel and tourism index eased to 55.3 in March from 57 in February.

The construction sector index rose to 54.8 in March from 53.3 in February, signaling a faster rate of growth in this sector last month, the bank said. New work growth expanded in March with the sub-index up to 59.4 from 55.9 in February. 

The Dubai Economy Tracker survey covers the emirate’s non-oil private sector economy. A reading of below 50 indicates that the non-oil private sector economy is generally declining; above 50 is generally expanding.