DUBAI (Rahnuma) : Dubai’s non-oil private sector continued its growth path last month, boosted by robust activity in travel and tourism, a latest reading of the emirate’s economy showed.
Emirates NBD’s seasonally adjusted Dubai Economy Tracker Index rose to 57.6 in March, the highest reading since May last year, from 55.8 in February. A number above 50 suggests expansion while below 50 indicates contraction.
Output in the travel and tourism sector was the strongest since the series began in March 2015, and was likely a key driver of the overall growth in activity in Dubai last month, Emirates NBD said.
The growth in Dubai’s travel and tourism segment reflected onto the wider economy as private sector business activity and output expanded at the sharpest rate in more than four years, with nearly 40 percent of firms surveyed reporting higher output last month compared with February.
New orders also rose at a faster rate in March, with this sub-index rising to 63.8 from 59.7 in March.
Emirates NBD, however, noted the sharp rise in output and new work was partially due to further price discounting, mostly in the retail sector, with selling prices declining at the fastest rate since December 2018.
“The pressure to reduce costs has meant that the recovery in activity and new work registered in March did not translate into much job growth; only 3 percent of firms surveyed reported increased hiring while 1 percent of firms reported lower headcount last month,” Khatija Haque, head of Mena research at Emirates NBD, said in the report.
Still, the surveyed firms had more optimism about their output next year, with more than three-quarters of them expecting their output to be higher in a year’s time.
“We continue to believe that Dubai’s growth will accelerate this year, as projects are completed ahead of Expo 2020, and as the US dollar weakens now that US interest rates have likely peaked,” Haque said.