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Dubai's private sector enjoyed increased overall business activity, marking five and a half years of continuous expansion, according to the July data of the Emirates NBD Dubai Economy Tracker. However, the report noted that growth momentum has moderated to its weakest since March 2012 amid softer contributions from the three key sub-sectors monitored by the survey.
Private sector companies in Dubai are nonetheless still highly upbeat about their prospects for the year ahead, according to report, which was the fourth release of data collected from a new monthly survey of business conditions in Dubai's non-oil private sector. This, in turn, contributed to a rise in employment numbers in July. Meanwhile, the latest survey suggests that pressure on margins persisted, as input costs increased over the month and average prices declined marginally across the private sector.
''The softening in activity in July is in line with other anecdotal reports, and probably reflects the impact that a stronger dirham and lower oil prices may be having on private sector output and sentiment,'' said Tim Fox, Chief Economist at Emirates NBD. ''Nonetheless at 53.1, the headline number still suggests relatively firm growth in the non-oil economy, and it is especially encouraging that despite the slowdown, firms in all three surveyed sectors remain extremely upbeat about future business activity.''
The latest reading of 53.1 is down from 55.5 in June, signalling that output growth was the slowest recorded in just under three and a half years and moderate overall. Construction remained the best performing broad area of activity in July, while travel and tourism and wholesale and retail saw only marginal rise in business activity.
Staff numbers rose across Dubai's private sector as a whole in July, which continued the upward trend seen each month since January 2012. Although the rate of job creation has eased since June, this growth is still the second-fastest seen over the past five months.
The data highlighted a solid upturn in new work received by private sector companies, led by a strong growth in construction and wholesale and retail sectors. That said, the overall pace of new business moderated over the month to its least since December 2010.
Companies retain a strong degree of positive sentiment towards the outlook for business activity over the year ahead, despite the level of confidence moderating from June's 19-month high. Anecdotal evidence highlighted the launch of new projects and expectations of improved market conditions.
Source: Property Weekly