A Sharp Rebound in New Orders: Increased Tourism Activity at the Start of Expo 2020
DubaiPMI
PMI indicates :
- Supply chains started to improve with the easing of travel restrictions.
- Opening of international borders.
- Seasonally adjusted IHS Markit Dubai PMI climbed to 54.5 in October from 51.5 in September.
Rate of Growth
- Sharp & Quickest since October 2019.
Aim
To grow tourism by 40 % to 25 million and merger of Dubai Economy with tourism shows the seriousness of the government when it comes to business.
Dubai Expo Triggers Economic Activity
- Dubai began the fourth quarter of the year in a strong position.
- With PMI data signalling the fastest rise in new orders for two years as Expo 2020 brought increased client demand and tourist numbers.
- Initial surge in sales contributed to a sharp expansion in activity.
- Job creation was again signalled across only a small proportion of the survey panel in October. However, with tourism reviving and capacity pressures growing, this will likely improve in the coming months.
Tourism recovery
- Recovery of tourism activity as flights resumed was a key factor behind the upturn.
- Firms reported an increase in client orders both at home and abroad.
Strongest Construction Activity
- Construction firms continued to see the strongest overall speed of recovery.
Job Pace
- Job creation across the non-oil private sector was only marginal.
- Staff hiring was partly linked to a rise in backlogs of work, which was solid despite easing slightly from the previous month.
Business Confidence
- Price pressures were muted again in October, as businesses signalled a marginal increase in input costs that was the joint weakest for eight months.
- Higher prices for raw materials such as steel led to a slight uptick in purchase costs.
- Regarding future output improved sharply in October, as the strong rebound in sales gave firms increased hope that the economy would quickly recover from the pandemic.
- Expectations were at their highest since March 2020, though they remained weak compared to pre-Covid trends.
Non-Oil Growth
- Pivotal driver of this recovery
Expectation: Expo 2020
Targeting to double FDI in the region prompted business volumes to increase exponentially.
Positive Outlooks for Non-Oil Growth
- Business activity for the UAE is on the upside, with clear positive outlooks for non-oil growth as the region recovers from the effects of the coronavirus pandemic.
- Uptick in oil prices compared to last year.
- Visiting companies will transfer part of their economic and financial activities to UAE.
- Start new investments in it- uplifting the overall business sentiment in the region.
Employment Levels Improving
1. Growth numbers were achieved on the expectation that the mega-event would boost the nation’s tourism sector since it could draw more than 20 million visits over the course of its six months.
2. Lifting of mobility restrictions, resumption of travel, and successful vaccination campaigns in the UAE has also been key to the current positive outlook
Residential Property Prices in Dubai
- Rebounding strongly from a record low at the end-2020 on the back of pent-up demand from both international and local buyers
- Improved investor and consumer sentiment
- Rebound in oil and gas prices
- Gradual macroeconomic recovery
- New visa and corporate ownership rules
Frequently Asked Question
Why the employment levels in the private sector have been improving since June 2021?
The UAE leadership has launched several new initiatives to foster a future-ready entrepreneurial ecosystem. The new visa schemes announced by the government have also had a positive impact on employment levels in the country. Among them are the Green Visa and the Freelance Visa schemes.
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