Dubai Economy Tracker unchanged in February
Source: ASDA'A BCW for Emirates NBD , Author: Posted by BI-ME staff
Posted: Mon March 11, 2019 1:35 pm

UAE. Business conditions in Dubai’s non-oil private sector economy continued to strengthen in February, at a similar rate to January. Total business activity rose at the fastest rate in nine months, while new business increased at a pace that remained above the 2018 average despite easing since January. Employment, however, fell at the fastest rate since the survey began in 2010.

The seasonally adjusted Emirates NBD Dubai Economy Tracker Index – a composite indicator designed to give an accurate overview of operating conditions in the non-oil private sector economy – was unchanged from January’s seven-month high of 55.8 in February. This signalled a strong improvement in business conditions that was faster than the trend for 2018.

Companies in the wholesale & retail sector reported the firmest volume growth in February, although with greater price discounting than in January.  The headline index for the sector rose to an eight-month high of 58.1, above the comparable figure for the travel & tourism sector (56.8, a nine-month high). The third key sector monitored – construction – also registered a stronger performance in February (54.0).

A reading of below 50.0 indicates that the non-oil private sector economy is generally declining; above 50.0, that it is generally expanding. A reading of 50.0 signals no change.

The survey covers the Dubai non-oil private sector economy, with additional sector data published for travel & tourism, wholesale & retail and construction.

Commenting on the Emirates NBD Dubai Economy Tracker, Khatija Haque, Head of MENA Research at Emirates NBD, said:

The growth in the volume of output and new work has been underpinned by continued price discounting, particularly in the wholesale & retail trade sector.  Firms’ margins continue to be squeezed as selling prices have declined on average for the last 10 months, while input costs have increased over the same period.  As a result, rising new orders have not translated into increased hiring and job growth in the private sector.  Indeed, employment declined at the fastest rate on record in February.”

Key Findings
- Dubai Economy Tracker unchanged from January’s seven-month high of 55.8
- Strongest rise in output in nine months
- Survey-record drop in employment

Business activity and employment 
February data signalled a rise in business activity in the non-oil private sector. Moreover, the rate of expansion accelerated to the fastest since May 2018. Wholesale & retail posted the strongest growth among the three key sectors.
However, the rate of contraction in workforces was the strongest registered since the series began in January 2010, despite faster activity growth.

Emirates NBD Dubai Economy Tracker Index™  
Seasonally adjusted, 50 = no-change


 
Sources: Emirates NBD, IHS Markit

Incoming new work and business activity expectations
Although total activity expanded at a sharper rate in February, growth of new business slowed since the start of 2019. That said, the pace of expansion was still stronger than the average for 2018. Moreover, new business in the travel & tourism sector increased at a near-record pace.

Dubai-based non-oil private sector companies remained strongly confident regarding the 12-month outlook in February. The respective index eased from January’s record, but was nonetheless among the highest registered since the series started in April 2012.

Input costs and average prices charged
Cost pressures strengthened slightly in February, as average input prices increased by more than in December and January. That said, the rate of inflation remained below the long-run survey average. Meanwhile, firms cut their charges for a record-equalling tenth successive month. Discounting was again centred on the wholesale & retail sector.

Emirates NBD Dubai Economy Tracker Index: Sector summary
Seasonally adjusted, 50 = no-change


 
Sources: Emirates NBD, IHS Markit

Photo Caption: Khatija Haque, Head of MENA Research at Emirates NBD

About The Emirates NBD Dubai Economy Tracker™
The Emirates NBD Dubai Economy Tracker™, produced by IHS Markit, is based on data compiled from monthly replies to questionnaires sent to senior executives in approximately 600 private sector companies, which have been carefully selected to accurately represent the true structure of the Dubai economy, including manufacturing, services, construction and retail.

The panel is stratified by Standard Industrial Classification (SIC) group, based on industry contribution to GDP. Survey responses reflect the change, if any, in the current month compared to the previous month based on data collected mid-month.

For each of the indicators the ‘Economy Tracker report’ shows the ‘diffusion’ index. This index is the sum of the positive responses plus a half of those responding ‘the same’. Diffusion indexes have the properties of leading indicators and are convenient summary measures showing the prevailing direction of change. An index reading above 50 indicates an overall increase in that variable, below 50 an overall decrease. 

The Dubai Economy Tracker Index is a composite index based on five of the individual indexes with the following weights: New Orders - 0.3, Output - 0.25, Employment - 0.2, Suppliers’ Delivery Times - 0.15, Stock of Items Purchased - 0.1, with the Delivery Times index inverted so that it moves in a comparable direction. The Dubai Economy Tracker Index is comparable to the UAE Purchasing Managers’ Index.

IHS Markit do not revise underlying survey data after first publication, but seasonal adjustment factors may be revised from time to time as appropriate which will affect the seasonally adjusted data series.

About Emirates NBD
Emirates NBD is a leading banking Group in the region. As at 30th June 2018, total assets were AED 477.5 Billion, (equivalent to approx. USD 130 Billion). The Group has a significant retail banking franchise in the UAE and is a key participant in the global digital banking industry, with over 90 per cent of all financial transactions and requests conducted outside of its branches. The bank was declared the Most Innovative Financial Services Organization of the Year at the 2017 BAI Global Innovation Awards.

The bank currently has 227 branches and 1065 ATMs and SDMs in the UAE and overseas and a large social media following, being the only bank in the Middle East ranked among the top 20 in the ‘Power 100 Social Media Rankings’, compiled by The Financial Brand. It is a major player in the UAE corporate and retail banking arena and has strong Islamic Banking, Global Markets & Treasury, Investment Banking, Private Banking, Asset Management and Brokerage operations.

The Group has operations in the UAE, the Kingdom of Saudi Arabia, Egypt, India, Singapore, the United Kingdom and representative offices in China and Indonesia.

The Group is an active participant and supporter of the UAE’s main development and community initiatives, in close alignment with the UAE government’s strategies, including financial literacy and advocacy for inclusion of People with Disabilities under its #TogetherLimitless platform. Emirates NBD Group is an Official Premier Partner of Expo 2020 Dubai.

For more information, please visit: www.emiratesnbd.com

About IHS Markit (www.ihsmarkit.com
IHS Markit (Nasdaq: INFO) is a world leader in critical information, analytics and solutions for the major industries and markets that drive economies worldwide. The company delivers next-generation information, analytics and solutions to customers in business, finance and government, improving their operational efficiency and providing deep insights that lead to well-informed, confident decisions.

IHS Markit has more than 50,000 business and government customers, including 80 percent of the Fortune Global 500 and the world’s leading financial institutions.

 

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