Private sector companies in Dubai posted a drop in growth for the first time since 2010, according to the monthly economy tracker index from Emirates NBD.
The index fell from 50.7 at the start of 2016 to 48.9 in February, a statement said.
A reading of below 50 indicates that the economy is generally declining.
Travel and tourism companies in the emirate saw the biggest decline in business conditions, the report said. The construction and wholesale and retail sectors also deteriorated, although at marginal rates.
Head of MENA Research at Emirates NBD Khatija Haque said: “The Emirates NBD Dubai Economy Tracker reading in February highlights the challenges faced by Dubai’s external-oriented service-based economy.
“Uncertainty about global economic growth, volatility in financial markets and low oil prices have weighed on sentiment and activity, while tourism and retail trade has also been affected by a strong US dollar. ”
The latest survey data signalled a reduced amount of new business in Dubai’s private sector during February.
Companies that reported lower new business generally said that an uncertain global economic outlook and falling oil prices had made clients more unwilling to commit to spending.
Input prices also declined across the economy. Meanwhile, prices charged fell at the sharpest rate in the series’ history amid reports of increased competition for new work.
The report also found that private sector companies in Dubai only raised their workforce numbers slightly in February, in line with each of the past three months.
A number of monitored businesses also mentioned that staff hiring had been dampened by softer growth in new work.