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Business expansion in Dubai’s grew at a much slower rate last month, edging close to a 68-month low, according to Emirates NBD’s Dubai Economy Tracker. The weaker growth was partly driven by a slight fall in business activity among travel and tourism companies, while both construction and wholesale and retail sub-sectors registered slower increases in activity in October.
Though robust overall, growth in new orders followed a similar trend to activity, registering the second weakest sate of expansion since December 2010. With output and new orders both expanding at or close to multi-year lows, private sector firms raised their staff numbers at the weakest rate in nearly four years in October.
Companies, meanwhile, signalled a sustained squeeze on operating margins, with input prices rising moderately, while prices charged declined, albeit marginally.
“The construction sector survey data is encouraging as it signals relatively robust growth in new orders and output in October, despite heightened concerns about government spending in the face of sustained low oil prices,” said Khatija Haque, Head of Middle East and North Africa Research at Emirates NBD.
At 51.4, the seasonally adjusted Emirates NBD Dubai Business Activity Index remained above the neutral 50 value last month to signal a further rise in private sector business activity. However, the reading was down from 56 in September and pointed to the weakest rate of expansion since February 2010. The pace of activity growth moderated across both construction and wholesale and retail companies, while travel and tourism firms saw a slight fall in activity.
Employment growth also slowed in October, with private sector companies registering the weakest increase in staff numbers in the current 46-month sequence of job creation.
• Business activity in the private sector expands at slowest rate since February 2010
• Construction and wholesale and retail firms increase activity, but declines seen in travel and tourism
• Employment endures weakest pace in nearly four years