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Dubai private sector grows slightly in June

Xinhua, July 11, 2016 Adjust font size:

The private sector in the sheikhdom of Dubai, the business and trade hub of the United Arab Emirates, pointed to a "sustained recovery in growth momentum" in June, said the UAE's biggest bank, Emirates NBD, on Monday.

The Emirates NBD Dubai Economic Tracker, a composite indicator which measures the pulse of the private sector in the emirate of Dubai, with 2.5 million inhabitants, climbed in June to 54.6, up slightly from 54.5 in May.

The lender said the uptick was driven by the improving business conditions in the travel and tourism, and wholesale and retail sectors.

Wholesale and retail, with a headline index of 58.2, was the best performing sub-sector monitored by the survey in June, followed by travel and tourism, 54.1, said Emirates NBD.

However, the latest survey pointed to only a modest upturn in construction sector business conditions. Dubai is the main driver of the UAE's non-oil sector as 90 percent of the Gulf state's oil is located in Abu Dhabi, the capital emirate of the UAE.

The UAE, with a total population of 10.5 million, comprises seven emirates, and less than 3 percent of Dubai's gross domestic product is based on oil.

Khatija Haque, head of Middle East and North Africa Research at Emirates NBD, said the improvement in the Dubai Economy Tracker index in June is underpinned by strong growth in new orders and output.

"The recovery in the travel and tourism sector last month is particularly encouraging as this sector had been relatively soft in previous months," she said.

However, she noted that the expansion has not led to increased employment, suggesting that firms are becoming more efficient in their operations.

Despite a sustained upturn in private sector output, staffing levels were broadly unchanged in June. This contrasted with rising employment numbers during the past four-and-a-half years. Some firms noted that uncertainty about the economic outlook had led to more cautious hiring strategies, said Emirates NBD.

Input price inflation remained moderate during June, with only the travel and tourism sector recording a faster rise in average cost burdens than in the previous month. Endit