Business activity growth in Dubai’s non-oil private sector firms slowed considerably during the month of June, a new survey showed.
The seasonally adjusted Emirates NBD Dubai Business Activity Index, a monthly poll of non-oil businesses, fell to a two year low in June. The index recorded 55.5 points in June, down from 57.6 in May.
The reading was the lowest seen since March 2013 and was slightly weaker than the series average (57.6), the survey noted.
While new orders for private sector firms rose in June, the rate of expansion edged down from May, recording the slowest rate since 2011.
The respondents to the survey said that greater competition for work and relatively subdued client demand restricted the growth of new orders for many businesses.
But despite a slower rate of expansion in new orders and growth, business confidence in the emirate was high. Optimism towards business outlook rose to a 19-month high in June, the survey showed.
Sector wise, construction firms showed the strongest growth in business activity, new orders and employment.
“The high level of business optimism bodes well as we head into the second half of this year,” said Emirates NBD chief economist Tim Fox said.
Dubai is one of the most diversified economies in the Gulf as it draws on its strength of being an aviation and tourism hub as well as a trading centre in the region.
However, there have been concerns about oil price volatility slowing government spending, in turn dampening private sector sentiment in the emirate.