Dubai’s non-oil economy maintains ‘solid’ pace in September | Tech Rasta


Business activity in Dubai’s non-oil private sector economy maintained a “solid” rate of expansion in September, albeit at a slower pace, as new orders rose sharply despite rising input costs.

The emirate’s seasonally adjusted headline and S&P Global purchasing managers’ reading hit 56.2, a three-month low, in September.

Softer increases in labor and inventory pulled back from the 38-month peak of 57.9 reached in August.

A reading above the 50 level indicates economic expansion while one below points to contraction.

“September PMI data continued to point to an improvement in operating conditions in non-oil businesses in Dubai, supporting estimates for the strongest quarter of growth in nearly three years,” said David Owen, economist at S&P Global Market Intelligence.

“That said, the headline index was down from its recent peak in August for the first time in five months, as rates of output expansion, new orders, employment and stock purchases slowed.”

While non-oil activity in the emirate, the Middle East’s trade and tourism hub, rose at a slower pace than in August, the pace of expansion was still the second fastest in more than three years, remaining above the long-term series average. . of 54.5.

“September’s reading marks the strongest quarter of growth in several years, supporting our view that Dubai and the UAE will remain among the world’s best performers in 2022,” Daniel Richards, Mena economist at Emirates NBD said in a research note on Tuesday .

The businesses surveyed emphasized their inability to grow operations due to “another significant increase in new business revenue”, according to the S&P survey.

After estimates of energy costs caused input prices to decline in August, the latest data showed a rise in costs in September.

However, the rate of inflation was the slowest on record in almost 12 months, as weak global demand continued to keep commodity prices in check while easing the cost burden on businesses.

September PMI data continued to point to a steady improvement in operating conditions in non-oil businesses in Dubai, extending estimates for the strongest quarter of growth in nearly three years.

David Owen, economist, S&P Global Market Intelligence

Oil prices, which rose sharply after the 23-member Opec+ group announced an output cut of 2 million barrels per day on October 5, have fallen again on worries about Chinese demand, the global economic slowdown and rising interest rates while with an increase in inflation.

The weak increase in costs last month also came amid a renewed shortening of input lead times, the second fastest since the start of 2021.

Output costs were later cut for the second straight month as companies made more efforts to make prices affordable for consumers.

However, the reduction in selling prices was mild compared to that of August.

Sectoral data showed that sales growth was mainly driven by wholesale and retail trade in September, which recorded a 38-month high.

New business in the travel and tourism sector, a major contributor to economic activity in the emirate, also rose sharply, although the pace of growth was the weakest since January, when Expo 2020 Dubai drove business.

Dubai welcomed 7.12 million international visitors in the first half of 2022, nearly three times the 2.52 million tourists recorded in the same period last year, as it pursued its goal of becoming the world’s most visited destination.

The latest figures bring the emirate close to its pre-coronavirus pandemic levels of 8.36 million arrivals in the first six months of 2019, despite the global economic slowdown.

“The industry is expected to enjoy a boost from the Fifa World Cup in Qatar until the end of the year,” Mr Richards said.

Dubai’s economy, which recovered significantly last year from the coronavirus downturn, has picked up growth so far this year, helped by the tourism industry and an improving property market.

The emirate’s economy grew by 6.2 percent in 2021, according to preliminary data from the Dubai Statistics Center. In the first three months of this year, Dubai’s gross domestic product increased by 5.9 percent, according to government data.

Businesses remained to develop the non-oil economy of the emirate. Panelists expect market trends to “remain strong despite global challenges, leading to further job growth and new results”, according to the study.

Updated: 11 October 2022, 7:50 AM


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