Dubai's non-oil economy shows resilience in July, despite global headwinds

Dubai's non-oil private sector displayed exceptional resilience in July, marking the year's second-highest growth rate. The surge in business activity and strong demand, coupled with occasional price reductions, was revealed by a recent business survey. In July, the Purchasing Managers’ Index(PMI) for the UAE, adjusted for seasonal variations by S&P Global, climbed from June's 54.8 to reach 55.4. While it dipped just below May's high of 55.6, the year's swiftest growth, the index significantly maintained its position well above the pivotal mark of 50, symbolizing sustained expansion.

The output sub-index surged to a year-high of 62.5, demonstrating a significant rise in activity levels. While the rate of job creation fell slightly from 51.2 in June to 51.0 in July, it remained positive for the 14th consecutive month. The employment sub-index fell marginally, however companies remained upbeat about the future, evidenced by the PMI's rating on production expectations for next year, which fell to a 10-month low. Despite this decline, the PMI statistics highlighted the private sector's resilience and optimism about the future growth trajectory.

The survey's findings also highlighted an optimistic perspective on future activity within the private sector for July, primarily attributed to the enhancement of economic conditions fostering support for non-oil businesses.This positive outlook closely mirrored the average sentiment level observed since the emergence of the COVID-19 pandemic.

Non-oil sectors in the UAE have shown resilience in the face of global challenges and are projected to contribute considerably to the country's growth. Economists expect that the non-oil sector will lead growth in 2023, with tourism performing strongly. As the UAE aims to double its economy by 2030, continued expansion in non-oil industries will be critical to accomplishing this objective.