September PMI data registered modest economic recovery in Dubai
Mita Srinivasan
10x Industry

September PMI data registered modest economic recovery in Dubai

Dubai Purchasing Managers' Index posted at 51.5 in September, third successive monthly growth that has now consistently remained above the 50.0 mark since July

The IHS Markit’s Dubai Purchasing Managers' Index (PMI) has been posted at 51.5 in September, indicating a third successive monthly improvement in the performance of the non-oil private sector. The index rose from 50.9 in August but remained below that seen in July and markedly down on the series average of 54.7.

The latest survey data indicated stronger increases in both output and new business across the private sector in September. Notably, the rate of sales growth reached the strongest for ten months, driven by reports of higher client demand and the starting of new projects as more economic activity resumed.

The wholesale and retail sector saw another sharp rise in new orders during the month, with growth near-matching that seen in August. The strong upturn led a modest rise in construction work. Travel & tourism business continued to decline, albeit at the slowest pace since February.

In line with recent survey periods, firms in the Dubai non-oil sector reported price cuts during September to boost sales. The rate of discounting slowed from August but was still solid and partly accountable for the rise in sales. Meanwhile, output levels expanded solidly for the fourth month in a row, as firms noted efforts to build activity back to pre-virus levels.

Staff cuts continued to stave off any notable rise in cost pressures in September, with input prices up only marginally. Nevertheless, amid a solid drop in selling prices, margins remained under considerable pressure.

Business expectations regarding the year ahead ticked up at the end of the third quarter, albeit with companies overall giving a relatively subdued outlook for activity. Hopes of further growth were largely linked to a recovery in sales as COVID-19 lockdown restrictions are eased.

The PMI is derived from individual diffusion indices which measure 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.