Press Dossier   News Category    Economy    New licences up 20% in Jan as Dubai non-oil growth rebounds

KHALEEJ TIMES, Tuesday, Feb 12, 2019 | Jamadi Al Thani 7, 1440

New licences up 20% in Jan as Dubai non-oil growth rebounds

Emirates: Signifying a robust rebound in non-oil growth in Dubai at the start of 2019, the issue of new licences jumped 20 per cent to 2,046 during January 2019 compared to the same 2018 period, according to data released by Department of Economic Development and Emirates NBD.

As overall growth of Dubai's non-oil private sector economy quickened in January, firms were at their most optimistic regarding future growth prospects since at least 2012, Emirates NBD Dubai Economy Tracker Index report said.

"Total activity and new business both rose at marked rates despite only a slight increase in employment, suggesting companies were focusing on efforts to boost productivity," the bank said.

Among the new licences issued by DED, 64.5 per cent were commercial, 33.7 per cent professional, 1.2 per cent related to tourism and 0.6 per cent industry.

Within commercial sector, trade & repair services accounted for 34.2 per cent of the new licenses issued in January 2019, according to the distribution of economic activities. It is followed by real estate, leasing & business services (25.6 per cent), building & construction (16.0 per cent), community & personal services (9.8 per cent), hotels group (4.4 per cent), transport, storage & communications (3.6 per cent), manufacturing (2.4 per cent), financial brokerage (1.8 per cent), health & labour (0.8 per cent), education (0.8 per cent), and agriculture (0.6 per cent).

The DED report also showed that the top nationalities who secured licences in January included India, followed by Pakistan, Egypt, Bangladesh, China, Saudi Arabia, Britain, Jordan, Sudan and the Philippines.

Meanwhile, Emirates NBD Index - a composite indicator designed to give an accurate overview of operating conditions in the non-oil private sector economy - improved to 55.8 in January, from 53.7 in December. The latest figure signalled the strongest overall improvement in the business climate since last June. It was above both the trends for 2018 as a whole (55.0) and the long-run series history (55.2, since January 2010).

Of the three key sectors monitored, wholesale & retail (56.3) posted the strongest overall improvement in business conditions at the start of 2018, followed by travel & tourism (54.1). The headline index for the construction industry posted 53.8, little-changed from December's nine-month low but still signalling solid overall growth.

Khatija Haque, head of Mena Research at Emirates NBD, said the Dubai Economy Tracker has started the year on a positive footing, climbing from 53.7 in December to 55.8 in January, the highest level in seven months. 

"This marks a recovery from the weak growth in fourth quarter 2018 - the slowest expansion in the non-oil private sector since first quarter 2016 - and reaffirms our view that the Dubai economy will strengthen in 2019, owing to greater government spending and ongoing Expo preparations. This optimism is shared by survey respondents, which despite ongoing pressure on them, overwhelmingly expect that output will be higher in 12 months' time. The business optimism index rose to a series high in January."

Haque said both output and new orders improved in January, contributing to the strong headline reading.  

"The outperformer of the three sectors individually measured in the survey was wholesale and retail, which rose to the highest level since August 2018, but construction and travel and tourism both also saw improvements on recent months," said Haque.

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