Dubai’s construction and retail experience boom in June

Dubai’s construction : The construction and retail sectors in Dubai saw strong growth last month, as builders took on more work and retailers further slashed prices, according to a monthly survey.

The tourism and travel sector however did not fare so well, with job losses dragging down growth in the industry, according to the Dubai Economy Tracker Index by IHS Markit/Emirates NBD
The index for the construction sector rose to 57.1 in June from 54.6 the previous month on the back of increased output and new work as the emirate pushes forward with new hotel and residential property projects.

Dubai’s construction

Dubai’s construction

Business optimism in the sector rose to an all-time high of 89.1 due to the strong pipeline of projects.

Employment in the sector increased at a similar rate to May, while input costs remained “broadly unchanged” from the previous month, which further helped ease pressure on businesses, the survey found.

The wholesale and retail trade sector saw some improvement with its industry-specific index rising slightly to 58.6 in June, marking the highest reading since October 2017.

Yet the index for the emirate’s travel and tourism sector declined in June to a reading of 54.9, the lowest reading since December. While new work and output did increase, a decline in employment in the sector helped drag down the headline figure.

The employment index for the sector toppled to 48.8, marking the most job losses in the industry since records started in March 2015.

Dubai’s travel sector has been hit by the news last month that Virgin Atlantic will stop flights between London and the emirate. In May, Brunei Air announced plans to no longer fly to London via Dubai.

The decline in the tourism index contributed to the headline Dubai Economy Tracker slipping to 56 in June from 57.7 in May.

Headline employment levels remained broadly unchanged in June, despite growth in output across sectors.

The surveys also found that input costs inflation started to ease last month following the introduction of Value-Added Tax (VAT) on certain products at the start of the year.

However, total producer inflation remained higher in the first half of the year than in the same period last year, the survey found.

These price increases have not been passed on to the consumer with selling prices in June marginally lower than average, reflecting a trend seen throughout the first half of this year, according to the surveys.

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