Sharpest Rise In Dubai Private Sector Output For Almost One And A Half Years

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1. Press Release Under strict embargo until : 08:15 (DUBAI) / 04:15 (UTC), August 9th 2016 Emirates NBD Dubai Economy Tracker™ Sharpest rise in Dubai private sector output for almost one-and-a-half years Dubai, August 9, 2016: Dubai private sector companies signalled a positive start to the third quarter of 2016, with overall business conditions improving at the fastest pace since March 2015. This was highlighted by a rise in the headline seasonally adjusted Emirates NBD Dubai Economy Tracker Index from 54.6 in June to 55.9 in July. The index – a composite indicator designed to give an accurate overview of operating conditions in the non-oil private sector economy – has signalled a recovery in operating conditions in each month since the series-record low seen in February. Moreover, the latest reading is now back above the long-run survey average (55.1). The best performing sub-sector monitored by the survey was wholesale & retail (index at 57.3 in July), followed by travel & tourism (55.1) and construction (53.5). In each case, the latest readings were above the crucial 50.0 no-change value. 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 index in July is consistent with the rise in the whole UAE Purchasing Managers Index last month, and is underpinned by stronger new work and output growth. The wholesale & retail sector in particular probably benefitted from holiday spending over Eid.” Key Findings    Wholesale & retail remains best performing area of activity Construction and travel & tourism gain momentum in July Growth of new work continues to accelerate from soft patch recorded earlier in 2016
2. Business activity and employment Higher levels of business activity have now been recorded for five consecutive months , following the moderate decline seen in February. Moreover, the latest expansion of private sector output was the fastest since February 2015. While wholesale & retail companies recorded the strongest upturn in business activity, the acceleration in growth since June was driven by steeper rises in the construction and travel & tourism sectors. Greater levels of business activity translated into a moderate expansion of private sector employment in July. The latest increase in payroll numbers was the joint-fastest since November 2015, led by a rebound in job hiring among travel & tourism companies. Emirates NBD Dubai Economy Tracker Index™ Seasonally adjusted, 50 = no-change 65 60 55 50 45 Jan-10 Jan-11 Jan-12 Jan-13 Jan-14 Jan-15 Jan-16 Sources: Emirates NBD, IHS Markit Incoming new work and business activity expectations Steeper growth of incoming new business was the key factor underpinning the positive performance recorded in July. The latest expansion of new orders received by private sector firms was the fastest since March 2015. Survey respondents cited generally favourable business conditions, resilient client demand and competitive pricing strategies. Meanwhile, private sector companies remain confident about the year-ahead business outlook, although the degree of optimism eased since June in all three key sub-sectors. Input costs and average prices charged July data signalled that input price inflation remained softer than seen on average since the survey began in 2010. Moreover, the latest rise in overall cost burdens was the slowest for three months. At the same time, average charges increased only fractionally, although this contrasted with a sustained period of price discounting earlier in 2016. The overall rise in
3. average prices charged reflected a robust increase across the travel & tourism sector, while lower prices were reported by construction and wholesale & retail companies in July. Emirates NBD Dubai Economy Tracker Index: Sector summary Seasonally adjusted, 50 = no-change Jul-16 Jun-16 55.9 Whole Economy 54.6 57.3 Wholesale & Retail 58.2 55.1 Travel & Tourism 54.1 53.5 Construction 51.5 45 50 55 60 Sources: Emirates NBD, IHS Markit -Endsth The next Dubai Economy Tracker Report will be published on 11 September 2016 at 08:15 (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 IHS Markit Tel: +44-207-260-2234 Email: joanna.vickers@ihsmarkit.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 30th June 2016, total assets were AED 425.8 Billion, (equivalent to approx. USD 116 Billion). The Group has a significant retail banking franchise in the UAE and is a key participant in the global digital banking industry, with over 87 per cent of all financial transactions and requests conducted outside of its branches. The bank currently has more than 220 branches and over 955 ATMs and CDMs in the UAE and overseas and a large social media following, being the only bank in the Middle East ranked among the top 20 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 IHS Markit (www.ihsmarkit.com) IHS Markit (Nasdaq: INFO) is a world leader in critical information, analytics and solutions for the major industries and markets that drive economies worldwide. The company delivers next-generation information, analytics and solutions to customers in business, finance and government, improving their operational efficiency and providing deep insights that lead to well-informed, confident decisions. IHS Markit has more than 50,000 key business and government customers, including 80 percent of the Fortune Global 500 and the world’s leading financial institutions. Headquartered in London, IHS Markit is committed to sustainable, profitable growth. IHS Markit is a registered trademark of IHS Markit Ltd. All other company and product names may be trademarks of their respective owners © 2016 IHS Markit Ltd. All rights reserved. The intellectual property rights to the Emirates NBD Economy Tracker provided herein are owned by IHS Markit. Any unauthorised use, including but not limited to copying, distributing, transmitting or otherwise of any data appearing is not permitted without IHS Markit’s prior consent. IHS 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 IHS Markit be liable for any special, incidental, or consequential damages, arising out of the use of the data. IHS Markit is a registered trade mark of IHS Markit Limited.