Dubai business expansion dips in September

12 October 2015

Hiring of new staff slows due to lower orders

  • Construction sector leads expansion in September
  • Employment index weakest in 3.5 years
  • Travel and tourism sector upbeat on 12-month outlook

The pace of business activity expansion in Dubai’s private sector dipped from 57.6 in August to 56.0 in September.

Slower performance in September compared to the previous month is attributed to the softening of new orders compared to the average during the first half of the year, which in turn resulted in more cautious hiring stance among the private sector companies.

The expansion in employment is understood to be the slowest in three-and-a-half-years.

Despite the weaker expansion in September, Tim Fox, chief economist at Emirates NBD, which produces the monthly Dubai Economy Tracker, said the “pace of activity remains robust particularly in the construction sector”.

Business activity expansion was strongest in the construction sector (60.1), although the wholesale and retail sector growth index (58.1) also rose higher than the average. The overall weak performance by the travel and tourism sector, with an index that stood at 52.0, significantly weighed down on the the overall index.

Consistently the growth in output index was strongest in the construction sector and weakest in the travel and tourism sector. A relatively subdued price increase in raw materials was also observed in September.

Ironically, the travel and tourism sector indicated a more upbeat outlook compared to the construction and retail sectors for the next 12 months due to “more supportive economic conditions across the region.”

The slower expansion in the emirate’s private sector economy in September compared to the previous month, however, is still stronger than the 52.6 registered in July, the slowest in a 40-month period.

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