Research released last week about the health of Dubai’s private sector made for difficult reading. The Emirates NBD Economy Tracker Index showed that private companies signalled the first deterioration in overall operating conditions since data collection began six years ago.
Given the steadily worsening performance of the index over the last couple of months, this should not come as a huge surprise. All three segments covered by the index — travel and tourism, construction, and wholesale and retail — reported drops, while new orders also declined for the first time since 2010.
But for those who wish to seek them, there are still plenty of encouraging signs. The index also reported a slight increase in the private sector workforce, while companies surveyed said they had an improved level of optimism towards the one-year business outlook in February.
From the wider perspective, whereas some Gulf states have drastically cut spending, Dubai announced in December that its budget would rise by 12 percent in 2016, after a 9 percent rise the year before. Spending on infrastructure, transport and economic development will increase by roughly the same amount, in a boost to the many contractors and service companies who rely on the pipeline of future projects remaining strong. Dubai’s Roads and Transport Authority (RTA) has projected an 18 percent rise in revenues in 2016, and is cracking on with 55 projects.
