Dubai non-oil economic growth index slips slightly

Emirates NBD tracker falls to 56.3 in July from 56.5 in June

A key measure of Dubai's private non-oil economic health dipped slightly in July amid lacklustre employment growth but suggested nonetheless that there was still growth momentum in the emirate.

The Emirates NBD Dubai Economy fell marginally to 56.3 in July from 56.5 in June. A reading below 50 suggests that the non-oil economy is generally declining while a reading above 50 indicates that it is expanding.

“While the headline index continues to reflect strong growth in the non-oil economy in July, firms’ margins continue to be squeezed as they lower selling prices, particularly in the trade and hospitality sectors," said Khatija Haque, the head of Mena research at Emirates NBD. "Employment growth remains soft overall.”

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Growth in the non-oil private sector in July was boosted by gains in the wholesale and retail industries index which stood at 57.9 last month. That was followed by travel and tourism at 56.3 and the construction at 54.8.

The report noted that there was still a sharp increase in output despite the fact that it was at a slightly slower pace than June. Those gains were attributed by respondents to an increase in projects and more favourable economic conditions.

Still, job creation continued to be slight as it has been over the past five months despite the surge in expansion witnessed over the same period.