The non-oil private sector of Dubai continued to improve in April, reaching the highest level since late 2019, due to a sharp rise in output and new businesses as the emirate pushed its COVID-19 vaccination program at pace.
The seasonally adjusted IHS Markit Purchasing Managers’ Index for Dubai rose to 53.5 in April from 51 in March, suggesting the economy is moving closer to its pre-COVID growth trajectory. A reading above 50 indicates economic expansion while one below it points to a contraction.
The business activity of the non-oil private sector, grew for a fifth-straight month in April, according to IHS Markit. The largest growth contributor at the beginning of the second quarter was the increase in new orders, which pointed to the quickest rise in customer sales for a year-and-a-half.
The surge in the travel and tourism sector was also a key factor for last month’s upturn, with companies reporting the first rise in new businesses this year. Other driving elements of the Dubai economy’s growth are construction, wholesale and retail sectors, the survey revealed.
“The rise in output and new orders underpinned the return to pre-pandemic trends as business confidence has strengthened to the highest level in over a year. Travel and tourism firms recorded the most notable bounce in performance, amid increasing hopes of a rise in tourism activity later in the year, boosted by the rapid vaccine roll-out.”
The fourth consecutive uptick in Dubai’s non-oil private sector economy was backed by optimism about the coming year as the impact of the pandemic on the economy is expected to fade further with Dubai and other emirates continuing their push for mass inoculation against COVID-19.
Dubai has so far unveiled stimulus packages worth $1.93 billion to reduce the impact of the pandemic on the economy and support businesses and individuals. The emirate’s economy is forecast to expand 4 percent in 2021, according to government projections released in December.
The latest PMI survey showed that staffing levels also improved in April, a third increase in employment number in four months, as companies look to boost capacity as demand improves.