Dubai’s non-oil private sector maintains steady growth as PMI hits 55.7

The non-oil private sector in Dubai witnessed steady growth in July even as the emirate’s Purchasing Managers’ Index slipped slightly compared to June, an economy tracker revealed.

According to S&P Global’s latest report, Dubai’s PMI stood at 55.7 in July compared to a 10-month high of 56.9 in June.

The report noted that a cooling of demand growth drove the slight dip in the index in three key sectors: construction, wholesale and retail, and travel and tourism.

According to S&P Global, PMI readings above the 50-mark show growth, while those below 50 signal contraction.

The report noted that non-oil firms witnessed a sharp uplift in new business intakes, while some survey panelists noted that competitive conditions had dampened sales.

“Dubai’s non-oil private sector continued to record strong gains in business activity and demand as we head into the second half of the year. Growth in new order intakes, successful marketing and project wins drove a considerable upturn in output, with nearly a third of businesses seeing a monthly expansion,” said David Owen, senior economist at S&P Global Market Intelligence.

He said the latest data also showed that firms were more confident about the future, supply conditions continued to improve, and price pressures were stable.

The survey found that firms were more positive about future activity during July than in the prior month. However, the cooling of demand growth resulted in a fall in job creation which slipped to a three-month low in June.

Meanwhile, the month of July witnessed a general improvement in supply chains which contributed to a softening of inflationary pressures.

“Firms reported only a fractional uptick in their input costs, which was the smallest recorded in three months. In response, businesses continued to offer discounts to customers, although the pace of reduction in output charges was modest and the slowest since March,” said S&P Global in the report.

Dubai’s good performance comes in line with an unstick in the UAE’s non-oil economy, with its PMI staying at 56 in July, compared to 56.9 in June, as companies increased their hiring and buying activities, another report from S&P Global noted earlier this month.

It added that higher business activities in the UAE during the month of July were driven by an upturn in new orders, which was boosted by strong customer demand and improving market conditions.