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Business Conditions Continue To Recover In Dubai's Private Sector

IM Press Release
By IM Press Release
7 years ago
Business Conditions Continue To Recover In Dubai's Private Sector

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  1. Press Release Under strict embargo until : 09:15 (DUBAI) / 05:15 (UTC), June 9th 2016 Emirates NBD Dubai Economy Tracker™ Business conditions continue to recover in Dubai’s private sector Dubai, June 9, 2016: Dubai’s private sector recorded a robust improvement in overall business conditions during May. At 54.5, up from 52.7 in April, the seasonally adjusted Emirates NBD Dubai Economy Tracker Index has now posted above the crucial 50.0 no-change value in each of the past three months. The headline index - a composite indicator designed to give an accurate overview of operating conditions in the non-oil private sector economy - was much stronger than the survey-record low seen in February (48.9) and indicated the steepest improvement in business conditions since August 2015. Wholesale & retail remained the best performing of the three key sub-sectors monitored by the survey in May (index at 56.4), closely followed by construction (55.5). Travel & tourism also recorded an overall upturn in business conditions (51.8), but the pace of improvement eased to a three-month low in May. The headline Emirates NBD Dubai Economy Tracker Index is derived from individual diffusion indices which measure changes in output, new orders, employment, suppliers’ delivery times and stocks of purchased goods. A reading of below 50.0 indicates that the non-oil private sector economy is generally declining; above 50.0, that it is generally expanding. A reading of 50.0 signals no change. The survey covers the Dubai non-oil private sector economy, with additional sector data published for travel & tourism, wholesale & retail and construction. Commenting on the Emirates NBD Dubai Economy Tracker, Khatija Haque, Head of MENA Research at Emirates NBD, said: “The improvement in the Dubai Economy Tracker in May was due mostly to strong growth in output and new work, which is encouraging as it suggests that demand remains robust. Margins are still being squeezed as firms reduce prices to secure new work, but business optimism remains high.” Key Findings    Fastest rise in overall business activity since March 2015 Growth of incoming new work accelerates to an eight-month high All three key sub-sectors experience improved business conditions, led by wholesale & retail
  2. Business activity and employment May data signalled a rise in business activity for the third month running , which firms linked to new sales wins, greater confidence among clients and successful marketing strategies. The latest expansion of private sector output was the fastest since March 2015 and above the average since the survey began in 2010. Steeper growth of wholesale & retail and construction activity helped to offset a slight slowdown across the travel & tourism sector. Increased staffing levels were recorded across the private sector in May, which continued the upward trend seen in each month since December 2011. Emirates NBD Dubai Economy Tracker Index™ Seasonally adjusted, 50 = no-change Sources: Emirates NBD, Markit Incoming new work and business activity expectations A robust and accelerated improvement in new order books helped to underpin the overall recovery in business conditions during May. The latest rise in new work was the steepest since September 2015, which firms attributed to a greater willingness to spend among clients and, in some cases, successful price discounting strategies to generate new sales. Private sector companies remain upbeat about their growth prospects for the next 12 months, and the degree of positive sentiment picked up slightly since April. Construction firms were the most optimistic in May, with survey respondents citing new development projects and opportunities related to Expo 2020 in particular. Input costs and average prices charged Average cost burdens increased at a moderate pace in May, although the latest rise was the fastest since August 2015. Survey respondents pointed to a combination of higher raw materials
  3. costs and greater staff salaries . Meanwhile, prices charged by private sector firms were reduced for the fifth month running, which was linked to ongoing discount strategies and strong competition for new work. Emirates NBD Dubai Economy Tracker Index: Sector summary Seasonally adjusted, 50 = no-change Sources: Emirates NBD, Markit -Endsth The next Dubai Economy Tracker Report will be published on 11 July 2016 at 09:15 (DUBAI) For further information, please contact: Ibrahim Sowaidan Head - Group Corporate Affairs Emirates NBD Telephone: +971 4 609 4113 / +971 50 6538937 Email: ibrahims@emiratesnbd.com Tricia Rego ASDA’A Burson-Marsteller; Dubai, UAE Tel: 971-4-4507600; Fax: 971-4-4358040 Email: tricia.rego@bm.com Joanna Vickers Corporate Communications Markit Tel: +44-207-260-2234 Email: joanna.vickers@markit.com
  4. Notes to Editors The Emirates NBD Dubai Economy Tracker ™, produced by Markit, is based on data compiled from monthly replies to questionnaires sent to senior executives in approximately 600 private sector companies, which have been carefully selected to accurately represent the true structure of the Dubai economy, including manufacturing, services, construction and retail. The panel is stratified by Standard Industrial Classification (SIC) group, based on industry contribution to GDP. Survey responses reflect the change, if any, in the current month compared to the previous month based on data collected mid-month. For each of the indicators the ‘Economy Tracker report’ shows the ‘diffusion’ index. This index is the sum of the positive responses plus a half of those responding ‘the same’. Diffusion indexes have the properties of leading indicators and are convenient summary measures showing the prevailing direction of change. An index reading above 50 indicates an overall increase in that variable, below 50 an overall decrease. The Dubai Economy Tracker Index is a composite index based on five of the individual indexes with the following weights: New Orders - 0.3, Output - 0.25, Employment - 0.2, Suppliers’ Delivery Times - 0.15, Stock of Items Purchased - 0.1, with the Delivery Times index inverted so that it moves in a comparable direction. The Dubai Economy Tracker Index is comparable to the UAE Purchasing Managers’ Index. Markit do not revise underlying survey data after first publication, but seasonal adjustment factors may be revised from time to time as appropriate which will affect the seasonally adjusted data series. About Emirates NBD Emirates NBD is a leading banking Group in the region. As at 31st March 2016, total assets were AED 414.5 Billion, (equivalent to approx. USD 112.6 Billion). The Group is a leader of digital banking in the GCC and a key participant in the global digital banking industry, with over 80 per cent of all financial transactions and requests conducted through digital channels. The Group has a significant retail banking franchise in the UAE, with more than 220 branches and over 960 ATMs and CDMs in the UAE and overseas. In addition, Emirates NBD has a large social media following and is the only bank in the Middle East ranked among the top 25 ranking in the ‘Power 100 Social Media Rankings’, compiled by The Financial Brand. It is a major player in the UAE corporate and retail banking arena and has strong Islamic Banking, Global Markets & Treasury, Investment Banking, Private Banking, Asset Management and Brokerage operations. The Group has operations in the UAE, Egypt, the Kingdom of Saudi Arabia, Singapore, the United Kingdom and representative offices in India, China and Indonesia. The Group is an active participant and supporter of the UAE’s main development initiatives and of the various educational, environmental, cultural, charity and community welfare establishments. For more information, please visit: www.emiratesnbd.com
  5. About Markit Markit is a leading global diversified provider of financial information services . We provide products that enhance transparency, reduce risk and improve operational efficiency. Our customers include banks, hedge funds, asset managers, central banks, regulators, auditors, fund administrators and insurance companies. Founded in 2003, we employ approximately 4,000 people in 11 countries. Markit shares are listed on Nasdaq under the symbol MRKT. For more information, please see www.markit.com. The intellectual property rights to the Emirates NBD Economy Tracker provided herein are owned by Markit. Any unauthorised use, including but not limited to copying, distributing, transmitting or otherwise of any data appearing is not permitted without Markit’s prior consent. Markit shall not have any liability, duty or obligation for or relating to the content or information (“data”) contained herein, any errors, inaccuracies, omissions or delays in the data, or for any actions taken in reliance thereon. In no event shall Markit be liable for any special, incidental, or consequential damages, arising out of the use of the data. Markit is a registered trade mark of Markit Group Limited.