Dubai’s private sector witnessed its weakest overall expansion since February 2010 last month fuelled by slowing construction activity, according to local bank Emirates NBD.
The non-oil private sector economy ranked 50.7 in January, down from 51.8 in December and just above the 50.0 no change mark, according to the lender’s economy tracker.
The bank said the wholesale and retail sector saw an unusually large boost to business activity from the Dubai Shopping Festival but construction was hit by project delays and weaker confidence,
Employment levels increased slightly, but the rate of job creation was weaker than the long-run average. Some firms surveyed said the uncertain economic outlook had impacted staff recruitment, according to ENBD.
Total new orders placed by Dubai private sector companies increased moderately in January but survey respondents said that falling oil prices and economy uncertainty had acted as a brake on new business growth.
Construction firms recorded an outright fall in new work compared to an upturn in new business for the wholesale and retail sector.
“The Dubai Economy Tracker survey shows the services sectors continuing to face challenging market conditions at the start of this year, while construction sector activity has also slowed sharply. Weak external demand was evident in the main UAE Purchasing Managers Index survey for January, and this likely weighed particularly heavily on Dubai’s open, export oriented economy,” said ENBD head of MENA research Khatija Haque