According to the Dubai Economy Tracker index (DET), total business activity in the sector hit its highest rate in nine years during the month of May. The index, which stood at 57.9 in April, rose to a record 58.5 in May.
The research found the activity growth continues to be partly driven by competitive pricing offered in the emirate, especially when it comes to construction, wholesale, and retail industries.
Speaking on the significant numbers, Khatija Haque, head of MENA Research at Emirates NBD, said:
"The Dubai Economy Tracker survey points to faster growth in Dubai's non-oil private sector in May. However, the rise in output and new work continues to be underpinned by price discounting, as firms reduced their selling prices for the 13th consecutive month."
The rise is considered a positive sign when it comes to the diversification of the UAE's economy away from oil-driven profits. However, Haque stressed that the rise in business activity did not translate into the addition of new jobs in Dubai's private sector, saying this is a concerning factor for researchers.
"The earlier start to Ramadan this year may also have contributed to increased activity, particularly in the wholesale and retail trade sector. Nevertheless, the growth in the volume of activity and new work is not yet translating into meaningful job creation in Dubai's private sector, which is the key concern for us," she explained.
The new number's effect on Dubai-based businesses
The index rise likely "contributed to high levels of business optimism in Dubai's private sector, with nearly 88% of firms surveyed expecting their output to be higher in a year's time."
"52% of firms reported higher output/ activity last month while 50% reported increased new orders, significantly higher than in April," Haque wrote.
All in all, these numbers do reflect the fact that Dubai has seriously been working on broadening and strengthening its non-oil private sector industries.
Dubai has been growing its local business scene
In recent years, the emirate has become a hub for business in the region, providing entrepreneurs and companies from around the world a space to flourish and grow.
Under the emirate's futuristic plans, Dubai's Ruler Sheikh Mohammed bin Rashid Al Maktoum founded several initiatives aimed at supporting business opportunities. In 1999, the leader launched Dubai Internet City (DIC), a technology business community that helps innovators and entrepreneurs bring their visions to reality.
In 2007, Dubai Outsource City (DOC), a business park dedicated to regional and international outsourcing companies, also opened in the emirate.
In a recent interview with StepFeed, Managing Director of both DIC and DOC, Ammar Al Malik, spoke of how the entities are succeeding in creating a business environment like no other.
He explained how over the past few years, the entity successfully "developed a thriving hub for technology organizations and is presently home to several Fortune 500-listed companies in software, hardware, internet services and ICT, in addition to global multinationals, local small- and medium-sized enterprises (SMEs) and startups."
Both DIC and DOC have contributed to the enhancement of the private sector in the country. The sector aims to grow even more so within the next few years.