Dubai PMI improves in October

The Dubai PMI rose to 54.6 in October from 52.6 in November, largely on the back of faster new order growth.  One-third of firms surveyed reported higher new orders in October, the largest proportion since June.  The boost to new work was likely supported by further price discounting, as the selling price index fell to 44.8 signalling the steepest price discounting since February 2016.

The employment index rose to 51.0 in October.  While this is the highest reading since the beginning of 2018, it reflects only a slight net increase in jobs in the private sector – fewer than 3% of firms reported increased headcount, while 1.6% reported lower employment.   

Business optimism about future output remains high as firms look to Expo 2020 to drive output growth in a year’s time.

Firms cut prices in October to boost demand

Source: IHS Markit, Emirates NBD Research

The rise in new work in October was particularly evident in the travel & tourism sector, where new work increased the most in four months.  Business activity in the sector also increased at a faster rate in October, but even in this sector, price discounting was the steepest in eleven months.  Despite the strong rise in output and the pipeline of new work, employment in the travel & tourism sector rose at a slower rate than in September. 

The wholesale & retail trade sector index was largely unchanged in October from the previous month at 53.8.  Both output and new work increased at a slower rate in October, despite more firms having reduced selling prices. 

The construction sector saw output/ activity rise at the fastest rate in 3 months, although growth in the pipeline of new work remained soft.  Employment was largely unchanged in October.