Dubai’s non-oil private sector economy grew at its slowest rate in 14 months in December, according to Emirates NBD.
The bank’s purchasing managers’ index, compiled by IHS Markit, eased from 55.3 in November to 54.7 in December. A reading of above 50 indicates growth and below 50 a contraction.
This marked the slowest improvement in business conditions since October 2016 and was reflected across all sectors, according to Emirates NBD’s head of MENA Research Khatija Haque.
It was also in contrast to the index for the UAE as a whole, where growth hit a 34-month high.
“The decline in the Dubai Economy Tracker index in December is a little surprising, but appears to be broad-based across all the key sectors,” she said.
“Nevertheless, a reading of 54.7 still indicates economic growth in December. Looking at 2017 as a whole, the survey data suggests that Dubai’s economy grew at a faster rate than both 2015 and 2016.”
By sector, wholesale and retail was the best performing category with a score of 54.9, followed by construction with 53.5 and travel and tourism with 51.2. This was down from scores of 57.5, 54.5 and 52.0 respectively in November.
Growth in business activity was the lowest seen from Dubai’s non-oil private sector companies since April 2016 and the rate of hiring was the weakest since June 2017.
New orders continued a run of increasing activity since March 2016 but also grew at the slowest pace in seven months amid reports of easing domestic demand.
Average cost burdens grew for the 22nd straight month, despite a three-month low in input price inflation, and selling prices increased to end a three-month sequence of price discounting.
Elsewhere, the rate of output charge inflation was the highest seen by the index in the construction and wholesale and retail sectors since March 2015.
The weaker conditions did not appear to dampen business activity expectations for the future, however, with a greater degree of confidence than November and the series’ long-run average.
“According to anecdotal evidence, an expected economic upturn alongside incoming new projects underpinned confidence among non-oil private sector firms in Dubai,” Emirates NBD said.