Dubai: Employment growth picks up to 20-month high


Dubai - The emirate's non-oil private sector expanded at a solid pace.


Waheed Abbas

Published: Mon 9 Aug 2021, 8:49 AM

Last updated: Tue 10 Aug 2021, 4:37 AM

Dubai’s non-oil private sector expanded at the fastest pace in a year with employment growth spiking to a 20-month high in July and businesses recording growth in new orders, according to a new survey released on Monday.

The IHS Markit Dubai Purchasing Managers’ Index (PMI), which covers sectors such as travel and tourism, wholesale and retail and construction, rose from 51.0 in June to 53.2 in July. The upturn was the second-quickest since November 2019.

The survey results showed that non-oil firms often cited additions to sales teams in response to rising customer footfall. There was a renewed increase in employment among wholesale and retail companies, while growth accelerated in the travel and tourism and construction sectors.

The index rose due to a much faster rise in output levels at the start of the third quarter. Sector data showed that travel and tourism firms saw the most marked improvement in output growth since June, with wholesale and retail and construction also recording faster expansions.

“Growth in the Dubai non-oil economy re-accelerated in July, helped by a rise in customer numbers that boosted sales in the travel and tourism and wholesale and retail sectors. This was also a key driver of employment as firms frequently mentioned hiring sales staff, leading to the fastest rate of job creation since November 2019,” said David Owen, Economist at IHS Markit.

“Businesses will be hoping to build on the economic recovery throughout the rest of the year. At 53.2 in July, the headline PMI was at its second-highest in 20 months, to offer further reassurance that the economy is heading in the right direction,” said Owen.

Anish Mehta, immediate past chairman of the Institute of Chartered Accountants of India (ICAI), Dubai chapter, said the results of this survey are very convincing and at the same time not surprising at all because economic development is returning in Dubai.

“This all could be possible because of supportive macroeconomic policies of Dubai government to achieve sustained and inclusive growth which led to productive and decent employment. This also helped to contribute to the social well-being of the residents. In my view, 3 i’s – i.e. Investment, innovation and inclusiveness – led to higher employment. Employment growth is a major contributor to economic growth and development. Employed people produce goods and services and in turn receive wages and salaries which can then be spent on purchasing the goods produced and services rendered,” he said.

Anurag Chaturvedi, CEO of Chartered House, said the UAE is on the growth trajectory on the back of its forward-looking policies and measures to restrict Covid-19 infections.

“Flexibility on the Covid-19 restrictions improved economic activity which increased per capita expenditures on lifestyle and FMCG. This led to rising of employment in healthcare, real estate, retail, hospitality, logistics and e-commerce,” he said.

In addition, opening up of business events and increased occupancy at entertainment facilities also provided a much-needed boost. “Most of the businesses in UAE anticipate a rise in the business activity by 15-20 per cent in next 6 months considering the global inflow for the Expo.”

The IHS Markit survey results showed that companies often pointed to a rise in demand and improving economic conditions after the impact of Covid-19.

“New order volumes rose at the quickest pace in three months, whilst also exceeding growth rates seen throughout the 16 months prior to April. Firms signalled increasing pressure on capacity during July, as levels of outstanding work rose to the greatest extent for more than two years,” it said.


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