Business activity in Dubai’s non-oil private sector economy continued to expand in May as output increased for the sixth month running, supported by the construction sector in the emirate.
The seasonally adjusted IHS Markit Dubai Purchasing Managers' Index slipped to 51.6 in May from 53.5 in April. A reading above 50 indicates economic expansion while one below points to a contraction.
The latest data indicates a moderate improvement in Dubai’s non-oil private sector business activity, after hitting the 17-month high in April, as it moves closer to the pre-pandemic growth trajectory amid its rapid mass Covid-19 inoculation programme.
Output grew, albeit at a slower pace, as businesses surveyed said that work on ongoing projects has helped offset a slowdown in new business orders during May.
Construction was the only monitored sector to see a faster rise in output during the month. Activity in the sector has picked up pace ahead of the Expo 2020 in October as developers push to finish projects ahead of the six-month global trade fair that is expected to bring about 25 million visitors to the emirate.
The continued expansion of Dubai's non-oil private sector economy comes as the emirate continues to push for mass inoculation against the pandemic that forced border closures and lockdowns across the world last year. The UAE has conducted widespread testing and its high vaccination rate has helped in boosting business confidence as its economy continues to bounce back from the Covid-19-driven slowdown.
The UAE has administered more than 13.4 million vaccines, enough to cover more than 62 per cent of the country's population, according to Bloomberg's vaccine tracker. The government on Tuesday said the UAE's national vaccination campaign has reached close to 85 per cent of the total eligible population.
Dubai, the commercial and the tourism hub of the Middle East, has so far rolled out stimulus packages worth Dh7.1 billion ($1.93bn) to support its economy minimise the impact of the pandemic on businesses and individuals. The emirate’s economy is forecast to expand 4 per cent in 2021, according to government projections released in December.
The latest PMI survey showed that input prices picked up for the fourth month in a row, but the overall rate of inflation weakened to just a marginal pace that led to a “renewed decrease in output charges after firms raised their prices for the first time in three years during April”.