The DET index for February, released on Wednesday, declined to 48.9 in February from 50.7 in January, signalling that the regional conomy has begun to contract.
Output declines
Both output and new orders declined last month, with the output index falling to 48.0 from 51.8 in January, and new orders declining to 49.0 from 51.7.
Firms cut output prices for the third month in a row, amid increased competition for new business.
The output price index for construction fell to 44.5 in February, the lowest reading since the series began in March 2015. Output in travel & tourism declined to 47.7 in February from 51.7 in January, a series low for this sector.
The Dubai Economy Tracker is produced by Emirates NBD each month based on PMI methodology which is designed to provide an early signal of what is happening in Dubai’s economy and in some of its key sectors, including manufacturing, construction, wholesale & retail, travel and tourism, and real estate.
Modest falls
Emirates NBD’s economists said the extent of the contraction in February was modest overall. It also found employment was fractionally above January levels.
Respondents were also slightly more upbeat about the outlook over the coming 12 months than they were in January.
“The Emirates NBD Dubai Economy Tracker reading in February highlights the challenges faced by Dubai’s external-oriented service-based economy,” the bank said in its monthly index report.
“Uncertainty about global economic growth, volatility in financial markets and low oil prices have weighed on sentiment and activity, while tourism and retail trade has also been affected by a strong US dollar.”
Firms surveyed for the latest Economy Tracker did report that the uncertain outlook had had an impact on clients making them more unwilling to commit to spending.
“While firms were still optimistic about order growth over the next 12 months, the level of business optimism was much weaker in February, with this sub-index declining to 55.4 last month from 59.2 in January,” the bank’s report said.
