Dubai’s non-oil economy rises to its highest level in 3 years
Business activity in Dubai’s non-oil private sector economy maintained a robust pace of expansion in June. It improved at the fastest pace in three years, as new orders rose sharply despite inflationary pressures.
The seasonally adjusted S&P Global UAE Purchasing Managers’ Index rose to 56.1 in June from 55.7 in May, its highest reading since June 2019.
“The Dubai PMI continued its upward trend in June, reflecting more strength in new business and activities,” said David Owen, an economist at Standard & Poor’s Market Intelligence. “Demand for travel continued to support sales, and there was a renewed increase in new business, particularly in the construction sector.”
On the other hand, Owen pointed out that despite this, the economy is facing the challenge of growing inflationary pressures, which led to the fastest increase in prices since the beginning of 2018. In addition, the sharp rise in global energy insolvencies is straining businesses, while consumers suffer from the consequences of higher spending as a result of high prices of benzene.
He added: “In order to enhance purchases, many companies resort to stopping their price hikes at the present time, and providing offers where possible in order to combat strong competition in the market. However, if inflation continues to rise in the second half of this year, it will be difficult for companies to continue to suspend price increases.”