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UAE Freezones Biz News Updates
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Private-sector activity still high in Dubai’s economy in August
Private sector activity in Dubai remained close to 17-month highs in August
as output and new orders rose and business expectations improved.
The UAE purchasing managers’ index (PMI), an indicator for Dubai’s non-oil
growth, dipped in August compared to July, when there was an especially
strong reading, falling to 55.7 last month from 55.9 in July, said Emirates
NBD.
The Dubai bank sponsors the monthly survey of business conditions in the
UAE’s non-oil private sector by Markit, a financial information services
company. A reading above 50 indicates that the non-oil economy is growing,
while a reading below 50 suggests that it is contracting.
"After a strong reading in July, it is unsurprising to see a slightly softer
Dubai Economy Tracker index in August," said Khatija Haque, head of Mena
research at Emirates NBD.
"Output and new orders still increased sharply last month, partly due to
more aggressive price discounting by firms. Businesses also appear to be
more optimistic about the coming months, which is encouraging."
The bank said the three main sectors that are gauged for the report,
wholesale and retail, travel and tourism, and construction all showed
buoyant readings at 55.5, 54.7 and 52.6 respectively. Those surveyed said
strong sales growth in August was supported by improving economic
conditions and strategies to offer discounts to stimulate demand.
While sales have improved, the data collected indicated a very small
increase in private sector employment and that the rate of new jobs remained
slower than the survey’s average since it began in 2010.
Since the end of 2014, the UAE economy has suffered from an oil price
freefall, prompting cuts in public spending and falling consumer demand. The
price of oil has dropped by as much as 70 per cent since June 2014 as
slowing global growth reduced demand for energy and production increased in
the US as unconventional oil and gas extraction, known as fracking, boomed.
On Monday, the index for the UAE showed business activity growth also slowed
slightly for the country as a whole in August, also after a strong July.
Emirate NBD’s results chimes with other independent research conducted on
the UAE economy in recent months.
Consumer confidence in the UAE improved in the second quarter, reversing a
decline in the previous three months, a new survey showed.
The second-quarter confidence score for the UAE rose by five points to 109,
after declining four points in the previous quarter, the global information
company Nielsen said.
The outlook for job prospects advanced by nine percentage points, while the
personal finance sentiment gained six percentage points, it said.
"Market dynamics have not changed significantly, and consumers were
cautiously optimistic about spending intentions," said Arslan Ashraf, the
managing director of Nielsen UAE. "They continue to be prudent with their
expenses, especially when it comes to spending on new clothes, out-of-home
entertainment and out-of-home dining."
That overall pick-up in demand, however, also helped to improve Dubai’s
Department of Economic Development’s Business Confidence Index by 7.4 points
to 117.5 during the second quarter compared with a year ago.
Sept 8, 2016 |
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Courtesy The National
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