Private-sector activity in Dubai dipped slightly last month, but the emirate’s overall non-oil economic growth in the third quarter advanced at the fastest rate since the first quarter as tourism and travel bookings grew.
The UAE purchasing managers’ index (PMI) declined in September compared to August, falling to 55.1 from 55.7, Emirates NBD said.
The Dubai bank sponsors the monthly survey of business conditions in the UAE’s non-oil private sector by Markit, a financial information services company. A reading above 50 indicates that the non-oil economy is growing, while a reading below 50 suggests that it is contracting.
“The decline in the Dubai Economy Tracker index in September was only marginal, and overall the third quarter average indicates a faster pace of expansion compared to the first quarter and the second quarter,” said Khatija Haque, the head of Middle East and North Africa research at Emirates NBD
“Output and new order growth remains strong although company margins remain under pressure as firms reduced prices to secure new work. The rebound in the travel and tourism sector in September is encouraging, although it probably partly reflects the impact of the Eid holidays.”
The bank noted in the report that the rate of employment growth in September remained “marginal and weaker” than the survey’s long term average. Sales, however, got a boost last month as many firms surveyed reported that price discounting was bolstering demand as consumer confidence starts to recover.
Since the end of 2014, the UAE economy has suffered from an oil price freefall, prompting cuts in public spending and falling consumer demand. The price of oil has dropped by as much as 70 per cent since June 2014 as slowing global growth reduced demand for energy and production increased in the US as unconventional oil and gas extraction, known as fracking, boomed.
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