The private sector is Dubai is showing significant growth since last year March, according to the latest Emirates NBD Dubai Economy Tracker Index. The non-oil sector private economy has been seeing a boost since March 2016 when the growth index was recorded at 48.9. However, the following two months saw a major improvement from this record-low with the index standing at 54.5 in May, up from 52.7 in April.
A reading below 50.0 indicates the private sector is declining; a reading above 50.0, that it is growing.
The index monitored there sub-sectors in which wholesale and retail was the best-performing at 56.4, followed by construction at 55.5 and travel and tourism at 51.8.
“A robust and accelerated improvement in new order books helped to underpin the overall recovery in business conditions during May. The latest rise in new work was the steepest since September 2015, which firms attributed to a greater willingness to spend among clients and, in some cases, successful price discounting strategies to generate new sales,” the bank said.
The lender said that the research showed that private sector firms remained “upbeat about their growth prospects for the next 12 months”, with construction companies being the most optimistic, due to new projects and opportunities related to Expo 2020.
“The improvement in the Dubai Economy Tracker in May was due mostly to strong growth in output and new work, which is encouraging as it suggests that demand remains robust. Margins are still being squeezed as firms reduce prices to secure new work, but business optimism remains high,” commented Khatija Haque, Head of MENA Research, Emirates NBD.