- August 22, 2021
- Posted by: Vimal Hemachandran
- Category: Blog
Following the worldwide pandemic, the business climate in the cosmopolitan city of Dubai is on the path of improvement. In particular, the non-oil private sector economy has sped up at a tremendous pace.
Previously, the pandemic scenario with lockdown measures impacted supply, causing input costs to rise. Later, when the restrictions were lifted amid the emirate’s rapid mass vaccination programme, output levels rose much faster at the start of the third quarter, helping to push the index higher. Travel and tourism businesses saw the biggest increase in output growth since June, while the wholesale and retail sector and construction both surged at a rapid pace.
The seasonally adjusted IHS Markit UAE Purchasing Managers’ Index (PMI), which covers manufacturing and services, increased from 51.0 to 53.2 in July, indicating that non-oil private sector business conditions have improved.
“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,” said IHS Markit economist David Owen.
The Dubai government is working to diversify its economy away from oil by investing heavily in boosting commerce and industry in all non-oil areas, with the hope of increasing their standing in Ease of Doing Business Reports, which would help entice international companies to set up offices in the Emirate. According to a July poll by the Dubai Chamber of Commerce and Industry, business confidence in Dubai has reached a seven-year high, with firms expecting economic conditions to improve before the start of the Expo 2020 global exhibition and also anticipating that Dubai’s economy will grow by 4% this year.
Though the uncertain path of the pandemic and the impact of supply-side difficulties reduced growth forecasts, companies voiced optimism, saying that economic recovery would be dependent on vaccination campaigns and demand connected to Expo 2020 Dubai. The arrival of this mega event is projected to produce a variety of opportunities, resulting in an increase in employment and qualified personnel. It’s also a good moment for businesses to utilize their products and services while also pushing their limits. In comparison to large companies serving regional and global markets, SME’s were more optimistic about Dubai’s economy in the short term, while debt collection, late payments, strong price competition, and the high cost of raw materials were identified as key challenges and risks that could potentially impact the economic situation.
Dubai has an economic strategy to build a vibrant business climate that fosters development and innovation, resulting in greater ease of doing business, which leads to more entrepreneurship, better job possibilities, more government tax revenues, and higher personal earnings. It should be emphasized that Dubai has always been a smart investment for everyone from startups to multinational corporations, and it will continue to be so in the future despite the global tumultuous unrest.