Business conditions in Dubai remained flat last month even as the Middle East’s business hub showed signs of recovery from the pandemic.
“Global supply difficulties washed up on Dubai’s shores in March,” wrote David Owen, economist at IHS Markit. “This will constrain profit margins as competitive pressures and efforts to aid the recovery in demand led firms to lower output charges.”
IHS Markit’s Purchasing Managers’ Index rose to 51 in March from 50.9 in February, remaining above the 50 mark that separates growth from contraction.
An increase in input prices, fueled by raw-material supply shortages led to the fastest acceleration of input cost inflation since late 2018. Still, companies lowered selling charges to stimulate demand.
- Output continued to expand solidly, while new work picked up after a slight decrease in February
- Companies remained confident of a rise in business activity in the coming year as the economy recovers from the coronavirus pandemic
- Construction firms saw the second-sharpest increase in output since the middle of 2019 as some projects resumed following virus-related restrictions
- Shrinking travel and tourism activity continued to weigh on the recovery
- Outlook for future business activity among non-oil firms remained positive in March, although it fell from February’s five-month high
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