Dubai PMI at multi-year high in February

Dubai PMI at multi-year high in February

11 March 2024, Emirates NBD

The S&P Global PMI survey for Dubai picked up to 58.5 in February, from 56.6 the previous month. This marked the strongest reading for the index since May 2019, and was a significant improvement on January’s multi-month low. Indeed, the reading was the joint-strongest in nine years of the survey. Over a third of respondents saw output rise in February, with the measure at the highest level since August 2022. New work picked up again after January’s dip, and this saw firms hire at the fastest pace in eight and a half years, with business confidence improving once more.

Input prices rose at a faster pace in February, with some firms noting that the disruptions to shipping in the Red Sea were having an adverse effect on deliveries. Nevertheless, this was still lower than the long-run trend, and firms were still able to discount heavily, with the degree of output price cutting at the most acute since June 2023.

Travel & Tourism

The travel & tourism sector’s PMI was the strongest performing of the three individually tracked sectors as it ticked up to the highest reading since pre-pandemic 2019. Output was at a three-month high, while new work orders picked up at the quickest pace since October, in a positive signal for the coming months. Input prices rose at the fastest pace since November, but firms cut their selling prices more aggressively as business confidence picked up.

Construction

The construction index also improved in February, rising to the highest level since mid-2019. Output was at a multi-year high, and new orders accelerated from January’s dip. Input costs rose at the fastest pace in four months, but firms started discounting again in February after selling prices had risen in January. There was a significant jump in business expectations last month, and firms increased their hiring.

Wholesale & Retail

The wholesale & retail sector’s headline PMI reading was just marginally lower than the tourism sector’s as it recorded a sizeable improvement on the January print. This was supported by heavy price discounting, which was at the most aggressive since May 2023 and was significantly more acute than in the other two sectors. Input prices ticked up also but remained relatively benign. New work expanded at the same pace as seen in December, recovering from January’s dip, and firms ramped up their hiring with employment at the highest level since 2015.

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