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Kallanish Kallanish

Knowledge matters Knowledge matters

July, 18th 2019

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JUL 11
10:39

Dubai construction new orders acceleration 'surprising', says bank

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Dubai construction output rose at a record pace in June, helping to push Emirates NBD’s Dubai Economy Tracker (DET) index for the sector up to a seven-month high.

“We had expected, and continue to expect, strong output growth from the construction sector this year and H1 2020, as contractors aim to finish projects before Expo 2020,” the bank says in a report seen by Kallanish. “What has been more surprising for us is the recent (Q2 2019) acceleration in new orders, which again rose at a faster rate in June 2019.”

However, despite a rebound in new work and a sharp rise in activity in June, employment in the construction sector declined for the third month in a row. “This highlights the focus on efficiency and productivity in an environment of declining selling prices and margin compression for many businesses,” Emirates NBD observes. “Nevertheless, firms in the construction sector remain extremely optimistic about their output over the next year.”

The headline DET index was fractionally lower in June at 58.4 but remains near the four-year high recorded in May of 58.5. The survey data suggests that Dubai’s non-oil economy grew in the second quarter of 2019 at the fastest rate since early 2015.