Economic growth in UAE bucks the market

The UAE's economy has the wind in its sails, bucking the trend in emerging markets, show latest figures. Photo courtesy Marc Bow/Volvo Ocean Race

The UAE's rate of economic growth is bucking the trend in emerging markets and private-sector business confidence in Dubai is surging, according to three key indicators published yesterday.

An HSBC index that measures output in non-oil and manufacturing businesses rose to 54.5 points last month from 54.1 the previous month. A reading above 50 signals expansion, with a score below that representing a decline.

It was the 47th month in a row of improvement, underscoring the pace of recovery in the private sector since the global economic downturn in 2009.

The figures were released on the same day as two surveys that showed rising business confidence in Dubai, which accounts for most of the private sector's output.

More than 90 per cent of respondents to a survey by the Dubai Department of Economic Development (Ded) expected either an improvement or stability in business conditions by the end of the year. A similar survey by Dubai Chamber of Commerce and Industry had 48 per cent of business leaders forecasting a pick-up in conditions.

The positive figures are in contrast to a more uncertain outlook in other emerging markets. Surging growth in the Bric countries of Brazil, Russia, India and China has lost steam in recent months as those economies mature.

The HSBC index in particular is "another positive set of readings that shows the UAE maintaining momentum even as other more high-profile emerging markets lose steam", said Simon Williams, the bank's chief economist for the Middle East and North Africa.

Ishwar Chugani, the Middle East managing director of the clothing retailer Giordano, said an increase in tourists and other visitors to the UAE was one of the drivers of more brisk activity.

"There's a lot of positive developments happening in the market," he said. "We are increasing investment in locations and starting a fairly aggressive expansion in stores as we see there's a lot happening, especially linked to what the Government is doing."