Private businesses in Dubai witnessed a healthy recovery during the month of May, according to the latest Emirates NBD Dubai Economy Tracker Index.
The index, which was at 48.9 in February rose to 52.7 in April and then to 54.4 in May recording the steepest improvement in business conditions since August 2015.
It also marked the third consecutive month where the index posted above the crucial 50 no-change value as well as witnessing an eight-month high in the growth of incoming new work.
A reading of below 50 indicates that the non-oil private sector is declining. While a reading above 50 means the sector is expanding.
The most thriving sectors during last month were wholesale and retail which recorded an overalls surge in activity posting an index of 56.4. This was attributed to new sales wins, greater confidence among clients and successful marketing strategies.
Similarly, the construction sector’s activity scored 55.5 on the Dubai Economy Tracker index with the sector expressing the most optimistic sentiment in May with survey respondents citing new development projects and opportunities related to Expo 2020 in particular.
Travel and tourism also scored favorably with an index of 51.8, however, the pace of improvement eased to a three-month low in May.
The Dubai Economy Tracker index is an indicator of operating conditions in the non-oil private sector economy.
It is derived from individual diffusion indices which measures changes in output, new orders, employment, suppliers’ delivery times, and stocks of purchased goods.
The survey covers the Dubai non-oil private sector economy, with additional sector data published for travel & tourism, wholesale & retail and construction.
Commenting on the survey findings, Khatija Haque, head of Mena Research at Emirates NBD said that “the improvement was due mostly to strong growth in output and new work.
“Which is encouraging as it suggests that demand remains robust. Margins are still being squeezed as firms reduce prices to secure new work, but business optimism remains high.”