Output growth boosts Dubai economy tracker in Nov

The Emirates NBD Dubai Economy Tracker Index (DETI), an indicator of Dubai's non-oil economy, was slightly lower at 55.3 in November from 55.6 in October.

The rate of growth, however, remains above the series’ long-run average, underpinned by strong growth in output and new work, Emirates NBD said in a statement.

The output sub-index stood at 59.5 and new work was at 59.7. Employment, however, was broadly unchanged in November, with less than 1 percent of firms surveyed reporting hiring new workers last month, the report said.

“The November survey continues to show solid growth in Dubai’s economy last month, at a similar pace to the previous two months,” Khatija Haque, head of MENA research at Emirates NBD, said in the statement.

“However, the softness in employment and lack of pricing power suggests that the environment for businesses remains challenging,” she added.

Selling prices showed a marginal decline in November, although input costs increased. 

The lack of pricing power underscores the strong competition for new business, and this is unlikely to change in the coming weeks in our view, the bank said. 

“Nevertheless, firms remained optimistic on average in November, with nearly 13 percent of respondents expecting their output to be higher in a year’s time, and the rest expecting no change,” it added.

According to the survey of sectors, wholesale and retail trade outperformed the other sectors for the sixth month in a row in November.  The sector is expected to continue doing well in December as many consumers are likely to make purchases before VAT comes into effect in January, the report said.   

The wholesale and retail trade sub-index eased to 57.5 in November from a record-high reached the previous month.

Construction sector index fell to 54.5 in November from 56.3 in October, with its output index declining to 59.7 after several months of strong output growth.

Meanwhile, the headline travel and tourism sector index declined to 52 in November — the lowest reading in a year-and-a-half. “While the survey still shows expansion in the sector, the growth momentum has slowed sharply over the last three months compared with earlier this year,” the report said.