Dubai Business Activity Lost Steam in the Runup to World Expo
Dubai’s business activity grew at a slower pace last month, with new orders dropping for the first time since February even as the city prepared to launch its World Expo 2020 event.
The non-oil private sector grew for a tenth straight month, according to IHS Markit. Its Purchasing Managers’ Index for the Middle East’s main business hub was at 51.5 in September, above the 50 mark that separates growth from contraction, but down from 53.3 the previous month.
“The Dubai non-oil sector saw a dip in demand during September,” said David Owen, an economist at IHS Markit. However, “the Expo 2020 has now begun, which should drive increased sales in the services sector over the next six months at least. Whilst IHS Markit predicts that the direct growth impact from the event will be modest, the latest PMI data highlighted a considerable impact on near-term business confidence.”
- Dubai’s construction industry led the overall fall with new work dropping for the first time since June.
- Travel and tourism saw an uptick driven by increased demand from Expo 2020.
- Employment levels rose only slightly and by the least in four months.
- Input costs rose but the rate of cost inflation was marginal leading to a reduction in the price average.
- Business confidence was better as companies cited Expo 2020 would drive more sales.
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