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Non-oil private sector activity in the Emirate of Dubai picked up again last March.
The Purchasing Managers’ Index for the non-oil private sector in Dubai, released by S&P Global on Tuesday, rose to 55.5 points in March compared to 54.1 points in February.
The index recorded the highest level in 5 months.
The economy of the Emirate of Dubai is a major component of the UAE’s GDP and is one of the largest oil producers and exporters, seeking to diversify its sources of income away from energy.
The index indicated an improvement in the performance of the non-oil private sector as it remained above the neutral level of -50 points.
David Owen, an economist at S&P Global, said in a report that the index rebounded from a 12-month low recorded in February.
Owen attributes this improvement to the subsequent increase in employee levels and the sharpest component purchases in about 5 years, allowing companies to increase their production in 6 months.
“However, there is a further slowdown in new business growth. Demand growth appears to be continuing to weaken from the post-Covid peak as slippages develop in the wholesale and retail trade and travel and tourism sectors. This suggests there may not be rapid growth in activity. Stay tuned, this is “Reflected in a slight reduction in future expectations,” Owen said.
In March, manufacturing, employment and purchase inventories all saw strong growth, while consumer demand improved significantly, leading to the strongest increase in activity since September, the report said.
New business inflows also rose sharply, but the rate of expansion was slightly slower than in February and the slowest in a year.
According to the report, the data indicated that the rate of job creation has picked up sharply since January 2018, although it has remained modest overall.
Stock and prices
Input stocks grew at the fastest pace since May 2018 as firms purchased large quantities of raw materials to service existing and new projects.
Prices of manufacturing inputs saw a further increase in March with a rise in fuel, cement and steel prices and a slight increase in employee wages, but despite this, the overall increase in business costs remained modest.
To maintain strong sales volume, companies cut production prices for the eighth month while offering discounts to customers.
In terms of future expectations, the level of positivity fell slightly from February, the lowest level in a year.
(Prepared by: Shaima Hefzi, contact [email protected])
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