Economic output in Dubai increased between January and August this year, but is still down on the same period in 2014.

The output index, one of four that make up the composite Dubai business activity index, expanded to register an average of 59.1 points between the first eight months of 2015. But it is three full points lower compared with the corresponding period of 2014.

Tim Fox, chief economist at local bank Emirates NBD, which has been conducting the monthly survey for several years, attributed the relatively weaker output mainly to the negative sentiment produced by the sharp decline in oil prices.

In addition to output, the other individual indexes covered by the survey are new orders, employment and costs or prices. Employment and new orders continued to rise in August, while discounting of selling prices were the order of the day across the three sub-sectors. This has driven the rate of prices downward for the seventh consecutive month.

Discounted selling prices amid an increase in input costs meant a further squeeze in operating margins for private sector businesses in Dubai, according to Emirates NBD.

The composite index value in August was 57.6, which is 4.5 points higher than the value recorded in July. The index has 50 as a neutral value.

The real estate and construction sector dominated the composite index in August, registering at 58, or some 0.4 points higher than the average overall composite index value.

While the industry performed better relative to the combined wholesale and retail sector, and travel and tourism, it seems to now be experiencing a phase of uncertainty.

According to Fox, 60 per cent of respondents from the real estate and construction sector indicated that property values had weakened in August, compared with 13 per cent who expressed that property values rose. The rest (27 per cent) indicated that property values in August were unchanged.

MEED has reported on the less than rosy performance of Dubai’s real estate sector in recent months.