Dubai's non-oil private sector experienced growth in July propelled by significant rises in production and the establishment of new businesses, as per the recent S&P Global Purchasing Managers' Index (PMI) report. The July seasonally adjusted PMI index stood at 55.7, a slight decrease from June's 10-month peak of 56.9 but well above the neutral 50 marks, indicating expansion.
While the rate of growth has impeded slightly, overall morale has remained optimistic, with roughly 32% of surveyed enterprises reporting an increase in production. The production sub-index jumped to 62.5, indicating a substantial increase in activity levels. The rate of employment creation increased as well, but slightly slower than in prior months.
Expert economists from S&P Global Market Intelligence emphasized that Dubai's non-oil private sector sustained robust improvements in business activity and demand. This expansion was driven by effective marketing approaches, accomplished projects, and the influx of new orders. Nevertheless, the rate of new business growth exhibited a minor deceleration in July compared to June, particularly seen in industries like construction, wholesale, and retail, which registered more moderate increases in new businesses.
Although there was a dip in demand growth, companies maintained a positive outlook, driven by improved economic conditions. Optimism regarding future activity reached its second-highest point in over a year. Supply conditions were on the rise, and pricing remained stable, as outlined in the report. The report forecasts the ongoing expansion of Dubai's non-oil private sector throughout the latter half of the year. While the pace of sales growth is slightly slowed, the projected outlook suggests the demand surge will persist, albeit at a somewhat moderated pace.
Non-oil private sector growth aligns with larger economic trends in the UAE, where the GDP grew at a faster-than-expected 3.8% rate in the first quarter of the year. Growth in non-oil industries such as transportation, storage, lodging, culinary services, and finance and insurance drove excellent performance.
Furthermore, companies saw a notable rise in new business acquisitions, maintaining the growth trend seen since October 2021. Among sectors, travel and tourism displayed the highest demand growth, while construction fared the weakest. Confidence increased among firms for the future due to improving supply conditions and stable pricing. The survey further indicated greater optimism in Dubai's private sector regarding future activity, driven by improving economic conditions for non-oil businesses.
