Dubai’s non-oil economy reaches a pre-COVID high as travel and retail boom

Dubai’s non-oil private sector economy saw business activity reach a 38-month high as demand grew and input prices decreased at a record rate. From 56.4 in July to 57.9 in August, the emirate’s headline seasonally adjusted S&P Global purchasing managers’ index increased, reaching its highest level since June 2019.

When the value is over the neutral 50 thresholds, the economy is expanding; when it is below, it is contracting. The result, which was above the long-run series average of 54.5, showed a significant improvement under non-oil operating circumstances.

David Owen, an economist at S&P Global Market Intelligence, stated that the most recent PMI data “suggested that input costs at Dubai non-oil businesses had swiftly changed their direction in August, falling for the first time since the start of 2021 and at the quickest pace since the survey began almost 13 years ago.”

The recent declines in commodity prices were a major factor in lower expenses, and the stabilization of gasoline prices encouraged businesses to lower their output prices last month, boosting sales to a 38-month high. Since the start of June, oil prices have decreased by nearly 20%. In addition, input prices fell in August across all survey-covered industries, causing a significant reduction in total cost burdens that was the fastest ever seen in the series’ history. The reason for this was a decrease in gasoline, raw materials, and transportation costs.