Dubai: Businesses in Dubai picked up sufficient new orders during June to make it the best showing of the last 10 months, and which resulted in continued hiring. The cost of doing business was higher, but marginally, and that allowed firms to offer discounts to consumers and boost sales.
On the job front, businesses remain in hiring mode for a 14th straight month – and its best run in the last 6 years.
The latest Dubai PMI – Purchasing Managers Index - data reflect that of the wider UAE’s, with the private sector seeing less of the pressures from the run up in inflation that was there during the second-half of 2022 and early months of this year.
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Trevor Balchin, Economics Director at S&P Global Market Intelligence, said: “Dubai’s non-oil private sector economy enjoyed accelerating growth of new business in June, supporting another marked rise in overall output.
“All three of the key sectors monitored - construction, wholesale and retail and travel, and tourism - registered faster increases in new work mid-way through the year.”
In retail, the Eid breaks and the ongoing summer holiday buying have boosted retailer margins, while for construction, awards for some big-ticket projects has come at the most opportune time. As for travel, it continues to be a major propellant for the Dubai economy.
June PMI
The Dubai PMI for June shot up to 56.9 and a significant gain on May’s 55.3. The PMI numbers track how businesses are faring in terms of orders won, their cost of operations, and end-user pricing.
Strong demand led to further job creation, with the current 14-month run of growth the longest in over six years,” said Balchin. “Companies were also able to continue offering lower prices to customers despite a slightly faster rate of input price inflation during the month.”
The biggest employment gains are in construction, which is not surprising given the steady stream of new projects that are going into the tendering phase. Market sources expect more of the same in the coming weeks, with the property market still running hot.
Manage costs
Businesses will have some deft handling to do on holding the line on their costs. Construction firms have already faced the biggest increase in input costs, according to the S&P Global report.
Across the board, ‘average input prices rose at the fastest rate in three months, albeit one that remained weaker than the long-run series average since 2010’, the report added.
