According to a business survey, Dubai’s non-oil private sector economy grew thanks to higher consumer spending, which resulted in the joint-fastest increase in output since July 2020.
The IHS Markit Dubai Purchasing Managers’ Index (PMI) increased from 51.0 in June to 53.2 in July, including sectors such as travel and tourism, wholesale and retail, and construction. The recovery was the second-fastest since November 2019, and it was only slightly slower than April’s previous high.
Even though economic conditions remained sluggish, firms hired at the fastest rate in over 18 months. While some companies increased their output charges as a result of higher expenses, many others reduced their rates despite rising input prices due to global raw material shortages.
Mr. David Owen, Economist at IHS Markit, commented that “Growth in the Dubai non-oil economy re-accelerated in July, helped by a rise in customer numbers that boosted sales in the travel and tourism and wholesale and retail sectors. This was also a key driver of employment as firms frequently mentioned hiring sales staff, leading to the fastest rate of job creation since November 2019.”
Firms indicated increased capacity strain in July, as outstanding work reached its highest level in more than two years, the survey said.
However, the business picture remained gloomy in July. Those companies with a positive outlook for the coming year claimed that economic recovery will be dependent on vaccine programs and demand from Expo 2020 Dubai.
Further, Mr. Owen remarked “Businesses will be hoping to build on the economic recovery throughout the rest of the year. At 53.2 in July, the headline PMI was at its second-highest in 20 months, to offer further reassurance that the economy is heading in the right direction.”