Dubai non-oil private sector growth weakens in June

Dubai’s non-oil non-public sector development slowed additional in June, in line with the newest Purchasing Managers’ Index (PMI) for June launched on Sunday.

The seasonally-adjusted IHS Markit Dubai PMi fell for a second successive month from 51.6 in May to 51.0 in June.

Output development in Dubai’s non-oil financial system slipped additional in June, as a weaker rise in gross sales and provide shortages curtailed the sector’s restoration. Input value inflation accelerated as corporations noticed a mark-up in commodity costs, pushing output costs greater for less than the second time in three years.

Both output and new orders rose to a lesser diploma than in May, with the speed of output development the slowest seen within the present seven-month sequence of growth.

According to panellists, there was a common enchancment in financial situations because the affect of Covid-19 eased. However, this was countered by a slowdown in gross sales development and reviews from some corporations that uncooked materials shortages and value hikes had curbed work on new initiatives,” IHS Markit mentioned.

“Business exercise within the Dubai non-oil sector was hindered by weaker gross sales development and uncooked materials shortages in June, with the speed of development slowing to a seven-month low. Both the Construction and Travel & Tourism sectors noticed a discount in gross sales, with restrictions on journey typically talked about as a drag on the financial restoration. Wholesale and retail was the one monitored business to see an increase in new orders over the newest interval,” mentioned David Owen, Economist at IHS Markit.

“Input price inflation picked up in June, posting its second-highest level since December 2019. Lengthening delivery times, supply shortages and rising freight costs were often cited by panellists, leading to a second rise in output prices in three months following a near three-year run of decline,” he mentioned.

Business exercise continued to rise throughout the development and wholesale and retail sectors, however in each circumstances, the upturn slowed from the previous month. Travel and tourism exercise noticed a renewed upturn after a slight decline in May, IHS Markit mentioned.

Jobs information quickest since November 2019

But jobs information was fairly promising as there have been renewed efforts to extend employment numbers throughout June. In reality, the speed of job creation was the quickest since November 2019, however slower than the long-run collection common.

With enter prices rising, non-oil corporations marked up their output costs for less than the second time in 38 months, though the newest uptick was slower than that seen in April.

With competitors rising, some corporations diminished their promoting costs to draw new prospects, weighing on the general rise. Elevated enter costs led some corporations to decrease their purchases and draw from present inventories to fulfil new orders. Challenges with transport delays, in the meantime, meant that common lead occasions amongst suppliers lengthened for the fifth month working, IHS Markit mentioned.

-waheedabbas@khaleejtimes.com