Dubai’s non-oil private sector economy improved at its quickest pace in a year as demand rebounded and businesses recorded an increase in new orders in July.
The seasonally adjusted IHS Markit Purchasing Managers' Index reading rose to 53.2 in July from 51 in June. A reading above 50 indicates economic expansion while one below points to a contraction. The upturn was the second quickest since November 2019.
The latest data points to higher consumer spending that led to the joint-fastest increase in output since July 2020, pushing new employment in the emirate, the commercial and trading centre of the Middle East, to its quickest pace in more than a year and a half.
"Growth in the Dubai non-oil economy re-accelerated in July, helped by a rise in customer numbers that boosted sales in the travel and tourism and wholesale and retail sectors," said IHS Markit economist David Owen.
"Businesses will be hoping to build on the economic recovery throughout the rest of the year. The headline PMI was at its second highest in 20 months, to offer further reassurance that the economy is heading in the right direction.”
A much quicker rise in output levels at the start of the third quarter helped to propel the index upwards, with travel and tourism businesses recording the biggest improvement in output growth since June while the wholesale and retail sector and construction also expanded at a faster pace.
The latest data underscored the eight month of output expansion, the joint-fastest increase for the output index since July last year.
Surveyed businesses pointed to growth in demand and improving economic conditions as Covid-19 restrictions continue to be eased amid the emirate's rapid mass vaccination programme.
Delays to input shipments and shortages of key items led to higher input prices for companies in July. However, the overall rate of inflation remained modest, slower than the long-run average.
While some businesses raised output charges in response to higher costs, a greater number lowered them as part of their discount strategies to stimulate sales.
The volume of new orders rose at its quickest pace in three months and also exceeded growth rates recorded throughout the 16 months before April.
However, businesses underscored rising pressure on capacity in July as levels of outstanding work hit their highest level in more than two years, according to the survey.
Growth in the Dubai non-oil economy re-accelerated in July, helped by a rise in customer numbers that boosted sales in the travel & tourism and wholesale and retail sectors
David Owen,
economist, IHS Markit
The pace of Dubai's recovery has picked up on the back of wide-scale testing and vaccinations. The rapid response of the government and its "adaptive measures" to contain the pandemic have enabled the emirate to maintain economic growth despite headwinds, Sheikh Hamdan bin Mohammed, Crown Prince of Dubai, said last week.
On Friday, officials said 80.1 per cent of the UAE population had received at least one Covid-19 vaccine dose while 71.71 per cent are fully vaccinated. More than 17 million vaccine doses have been administered across the country.
Key sectors such as tourism and property have made a significant recovery on the back of Dh7.1 billion ($1.93bn) stimulus pumped into the economy since the onset of Covid-19. Dubai's economy is expected to grow by 4 per cent this year, according to government data.
Business confidence in Dubai has also hit a seven-year high as companies in the emirate expect business conditions to improve before the Expo 2020 world fair begins, according to a July survey by the Dubai Chamber of Commerce and Industry.
Companies employed more people in July. Non-oil businesses beefed up sales teams in response to rising customer footfall and the rate of new employment was the fastest since November 2019.
"There was a renewed increase in employment among wholesale and retail companies, while growth accelerated in the travel and tourism and construction sectors," IHS Markit said.
Businesses surveyed by IHS Markit expressed optimism towards future business activity, which rose to a three-month high, with some respondents pinning hopes on an economic recovery due to the vaccine programme and demand related to Expo 2020.
"We remain optimistic that non-oil sector growth will continue to accelerate through the end of this year, underpinned by high vaccination rates, increasing consumer spending and a gradual rebound in international travel," Emirates NBD, Dubai's largest lender, said in a statement on Monday.
If you go
The flights
There are direct flights from Dubai to Sofia with FlyDubai (www.flydubai.com) and Wizz Air (www.wizzair.com), from Dh1,164 and Dh822 return including taxes, respectively.
The trip
Plovdiv is 150km from Sofia, with an hourly bus service taking around 2 hours and costing $16 (Dh58). The Rhodopes can be reached from Sofia in between 2-4hours.
The trip was organised by Bulguides (www.bulguides.com), which organises guided trips throughout Bulgaria. Guiding, accommodation, food and transfers from Plovdiv to the mountains and back costs around 170 USD for a four-day, three-night trip.
UAE'S%20YOUNG%20GUNS
%3Cp%3E1%20Esha%20Oza%2C%20age%2026%2C%2079%20matches%0D%3Cbr%3E%0D%3Cbr%3E2%20Theertha%20Satish%2C%20age%2020%2C%2066%20matches%0D%3Cbr%3E%0D%3Cbr%3E3%20Khushi%20Sharma%2C%20age%2021%2C%2065%20matches%0D%3Cbr%3E%0D%3Cbr%3E4%20Kavisha%20Kumari%2C%20age%2021%2C%2079%20matches%0D%3Cbr%3E%0D%3Cbr%3E5%20Heena%20Hotchandani%2C%20age%2023%2C%2016%20matches%0D%3Cbr%3E%0D%3Cbr%3E6%20Rinitha%20Rajith%2C%20age%2018%2C%2034%20matches%0D%3Cbr%3E%0D%3Cbr%3E7%20Samaira%20Dharnidharka%2C%20age%2017%2C%2053%20matches%0D%3Cbr%3E%0D%3Cbr%3E8%20Vaishnave%20Mahesh%2C%20age%2017%2C%2068%20matches%0D%3Cbr%3E%0D%3Cbr%3E9%20Lavanya%20Keny%2C%20age%2017%2C%2033%20matches%0D%3Cbr%3E%0D%3Cbr%3E10%20Siya%20Gokhale%2C%20age%2018%2C%2033%20matches%0D%3Cbr%3E%0D%3Cbr%3E11%20Indhuja%20Nandakumar%2C%20age%2018%2C%2046%20matches%3C%2Fp%3E%0A
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MATCH INFO
Wales 1 (Bale 45 3')
Croatia 1 (Vlasic 09')
MATCH INFO
Quarter-finals
Saturday (all times UAE)
England v Australia, 11.15am
New Zealand v Ireland, 2.15pm
Sunday
Wales v France, 11.15am
Japan v South Africa, 2.15pm
HIJRA
Starring: Lamar Faden, Khairiah Nathmy, Nawaf Al-Dhufairy
Director: Shahad Ameen
Rating: 3/5
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AI traffic lights to ease congestion at seven points to Sheikh Zayed bin Sultan Street
The seven points are:
Shakhbout bin Sultan Street
Dhafeer Street
Hadbat Al Ghubainah Street (outbound)
Salama bint Butti Street
Al Dhafra Street
Rabdan Street
Umm Yifina Street exit (inbound)
The Melbourne Mercer Global Pension Index
The Melbourne Mercer Global Pension Index
Mazen Abukhater, principal and actuary at global consultancy Mercer, Middle East, says the company’s Melbourne Mercer Global Pension Index - which benchmarks 34 pension schemes across the globe to assess their adequacy, sustainability and integrity - included Saudi Arabia for the first time this year to offer a glimpse into the region.
The index highlighted fundamental issues for all 34 countries, such as a rapid ageing population and a low growth / low interest environment putting pressure on expected returns. It also highlighted the increasing popularity around the world of defined contribution schemes.
“Average life expectancy has been increasing by about three years every 10 years. Someone born in 1947 is expected to live until 85 whereas someone born in 2007 is expected to live to 103,” Mr Abukhater told the Mena Pensions Conference.
“Are our systems equipped to handle these kind of life expectancies in the future? If so many people retire at 60, they are going to be in retirement for 43 years – so we need to adapt our retirement age to our changing life expectancy.”
Saudi Arabia came in the middle of Mercer’s ranking with a score of 58.9. The report said the country's index could be raised by improving the minimum level of support for the poorest aged individuals and increasing the labour force participation rate at older ages as life expectancies rise.
Mr Abukhater said the challenges of an ageing population, increased life expectancy and some individuals relying solely on their government for financial support in their retirement years will put the system under strain.
“To relieve that pressure, governments need to consider whether it is time to switch to a defined contribution scheme so that individuals can supplement their own future with the help of government support,” he said.
How to watch Ireland v Pakistan in UAE
When: The one-off Test starts on Friday, May 11
What time: Each day’s play is scheduled to start at 2pm UAE time.
TV: The match will be broadcast on OSN Sports Cricket HD. Subscribers to the channel can also stream the action live on OSN Play.
