Dubai: Dubai’s non-oil private sector economy kept up the growth momentum in November with the Emirates NBD Dubai Economy Tracker Index (DETI) at 55.3 in November, not much different from the September and October readings.

The rate of growth remained above the series’ long-run average, however. At a sector level, wholesale & retail companies reported the strongest improvement in business conditions.

The DET survey covers the Dubai non-oil private sector economy, with additional sector data published for travel & tourism, wholesale & retail and construction.

“The November survey continues to show solid growth in Dubai’s economy last month, at a similar pace to the previous two months. However, the softness in employment and lack of pricing power suggests that the environment for businesses remains challenging,” Khatija Haque, head of Mena Research at Emirates NBD.

The strength of the overall index is underpinned by strong growth in output (59.5) and new work (59.7). However, employment was broadly unchanged in November, with less than 1 per cent of firms surveyed reporting hiring new workers last month.

“Selling prices showed a marginal decline in November, although input costs increased. The lack of pricing power underscores the strong competition for new business, and this is unlikely to change in the coming weeks in our view,” said Haque.

Survey data showed firms remained optimistic on average in November, with nearly 13 per cent of respondents expecting their output to be higher in a year’s time, and the rest expecting no change.

Inventories increased at a solid rate in November, although the index was down from the October high.

The sector surveys showed wholesale & retail trade outperforming the other sectors for the sixth month in a row in November. The sector is likely to continue to do well in December as many consumers are expected to bring forward purchases before VAT comes into effect in January.

The wholesale & retail sector index eased to 57.5 in November, still signalling strong expansion in the sector last month. Output and new work increased sharply (albeit slightly slower than in October) and employment also increased in the sector last month. Nevertheless, the overall rate of job growth remains modest.

Average selling prices were marginally higher last month compared with October. However, input costs rose at a faster rate than output prices, so margins remain under pressure.

Inventory accumulation remained high in November, as firms likely anticipated further strengthening in demand in December.

“While we expect the trade sector to do well into year-end, the introduction of VAT is likely to have a negative impact on consumer demand in the first few months of 2018,” Haque said.

After several months of exceptionally strong output growth in the construction sector, the output index eased to a still-high 59.7.

New work growth also slowed last month but remains firm with the index at 57.4.

The overall construction sector index fell to 54.5 from 56.3 in October, the lowest reading since February, but it remains well in expansion territory.

Moreover, firms remain optimistic about the prospects for the coming year, as Expo 2020 projects are expected to underpin activity in the sector.

The headline travel & tourism sector index declined to 52 in November from 53.9 in October, the lowest reading in a year-and-a-half. While the survey still shows expansion in the sector, the growth momentum has slowed sharply over the last three months compared with earlier this year.

This is most evident in the new work index, which fell to 53.6 in November from 57.4 in October and from an average of 60.9 in January through August.

Business activity (output) also rose at a slower rate last month, and employment was unchanged.