Dubai’s private sector growth eased slightly in February

The Emirates NBD Dubai Economy Tracker Index (DET) slipped slightly in February to 56.2, from the two-year high of 57.1 reached in January.

The tracker data signaled an improvement in overall business conditions across Dubai’s private sector economy, underpinned by increase in output and incoming new work, Khatija Haque, head of MENA research at Emirates NBD, said in the report released Thursday.

“Strong growth in output and new orders, which points to solid GDP growth in Q1 2017, is not being reflected in higher employment however, and competition continues to weigh on selling prices,” Haque said.

Output and new work growth expanded at a strong rate in February, although the output index eased to 61 while new work (62.4) increased at the fastest rate in two years.

Employment was broadly unchanged in February at 49.9. This may be due to ongoing margin compression, with output prices (48.6) declining on average for the seventh straight month in February even though input prices (51.1) rose, the report said.

The surveyed firms, however, were slightly more upbeat last month with the business expectations index rising to 73.4 from 70.9 in January, it added.

Wholesale and retail performed the best – for the first time in six months (index at 58.3) – followed by travel and tourism (index at 57.0).

Construction companies, meanwhile, recorded a slowdown in growth momentum, with the headline index down to 53.3 in February, from 55.4 at the start of the year.

The seasonally adjusted DET is a composite indicator designed to give an overview of the operating conditions in the non-oil private sector economy.

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.