Dubai’s non-oil private sector economy registered an improvement in business conditions in October, led by a rise in output.
That’s according to the monthly Emirates NBD Dubai Economy Tracker Index.
Despite growth in the economy, private sector companies in Dubai said employment numbers were broadly unchanged during October.
Survey respondents cited “pressure on margins and more cautious staff hiring policies in general,” the report said.
The seasonally adjusted index, which stood at 53.2 last month, remained above the 50 value for the eighth month running. However, the latest reading was down from 55.1 in September and pointed to the slowest growth momentum since April, the report said.
Travel and tourism remained the best performing broad category last month, followed by wholesale and retail. Construction companies recorded only a modest improvement in business conditions, partly reflecting a subdued rise in new business intakes.
Improving operating conditions led to an upturn in business activity, the index found. However, while the rate of output growth was faster than the long-run survey average, it eased since September to its weakest for six months.
New order growth also slowed to its weakest for six months.
“Anecdotal evidence suggested that strong competition for new work had weighed on growth in October, although some firms commented that price discounting had supported sales,” the report said.
Khatija Haque, head of MENA Research at Emirates NBD, added: “The softer reading for the Dubai Economy Tracker in October is consistent with what we’ve seen at the national level, and comes off a strong third quarter performance.
“Although the headline indices are lower, output and new work growth remains strong and we remain comfortable with our forecast of 3.5 per cent economic growth in Dubai this year.”
Companies surveyed were optimistic about their growth prospects for the year ahead. The degree of confidence edged up to its strongest for 16 months, primarily because of improved optimism across the travel and tourism sector.
Meanwhile, average prices charged by Dubai private sector firms dropped for the third month running, with the rate of discounting the fastest since February.
All the sectors recorded lower output charges in October, which was generally linked to competitive pressures and associated efforts to boost sales.