Dubai’s economy tape-recorded more powerful company activity in January on the back of faster output and brand-new orders, driven by the building and construction, tourist and travel and retail sectors.
EmiratesNBD’s Dubai Economy Tracker Index increased to 56.0 in January generally on the back of faster output and work development after relieving in the previous month. The output/company activity index increased greatly to 61.0 last month, the greatest reading considering that July.
Thework index increased to 52.3 in January, and while this does not suggest a shocking variety of brand-new tasks produced, the reading is the greatest considering that November 2015, Emirates NBD in its research study note launched on Sunday.
Firmstaking in VAT
Thestudy results exposed that brand-new orders increased greatly in January although at a somewhat slower rate than inDecember Stocks of pre-production stocks likewise increased at a slower rate, as numerous companies would have enhanced acquired in December ahead of the intro of value-added tax (VAT).
“The impact of the new tax is evident in the sharply higher input cost index [59.2 in January from 51.7 in December]. However, the selling price index only rose 1.7 points last month, to 52.2, suggesting that not all firms passed on the full impact of VAT to purchasers. In fact in the travel and tourism sector, prices were close to unchanged from December, suggesting that the full impact of VAT was absorbed by firms in this sector,”stated Khatija Haque, head of Mena research study at Emirates NBD.
Aftera fairly soft 4th quarter of 2017, the travel and tourist index increased to its greatest level considering that July at 55.7. Output rose (581 from 52.1 in December) as did brand-new work (581). Employment in the sector likewise increased at the fastest rate considering that March 2015, with this sub-index increasing to 53.5 in January.
TheDubai study information might appear to be at chances with the entire UAE PMI study as the index increased while the UAE PMI decreased a little inJanuary This is most likely due to that building and construction, tourist and travel and retail and wholesale trade, which all published faster development in output, brand-new work and work in January, represent a much larger share of Dubai’s economy relative to their share of entire UAE GDP.
“The rise in the Dubai Economy Tracker Index signals a strong start to 2018, despite the introduction of VAT putting upward pressure on both input and output prices. The construction sector had a particularly strong month in January, and this supports our view that construction will be a key driver of Dubai’s growth this year,”Haque included.
Theretail and wholesale trade sector index increased 1.2 points in January to 56.1, suggesting a strong rate of development, regardless of the intro of VAT.
Construction, tourist and ... by: Farah Grimm published: