Employment in Dubai’s non-oil private sector has fallen at the fastest rate since January 2010, according to the Emirates NBD Dubai Economy Tracker Index.

The index showed business conditions maintained January’s seven-month high of 55.8 in February.

A reading of below 50.0 indicates that the economy is declining, while above 50.0 indicates an expanding economy. A reading of 50.0 signals no change.

“The growth in the volume of output and new work has been underpinned by continued price discounting, particularly in the wholesale & retail trade sector,” according to Khatija Haque, Head of MENA Research at Emirates NBD.

“Firms’ margins continue to be squeezed as selling prices have declined on average for the last 10 months, while input costs have increased over the same period. As a result, rising new orders have not translated into increased hiring and job growth in the private sector. Indeed, employment declined at the fastest rate on record in February,” Haque said.

Firms cut their charges for a record-equalling tenth successive month, while average input prices increased since December and January, although the rate of inflation remained below the survey average.

Moreover, total business activity rose at the fastest rate in nine months, while new business increased at a pace higher than the 2018 average despite slowing down since January.

Companies in the wholesale and retail sector reported the steadiest volume growth in February due largely to greater price discounting when compared to January. The sector rose to an eight-month high of 58.1, the index showed, while the travel and tourism sector experienced a 56.8 nine-month high, and the construction industry saw a 54.0 reading in February.

New business growth slowed down since the beginning of 2019, but the pace of expansion remained stronger than the average in 2018. New business in the travel and tourism sector also increased at a near-record pace.

The Emirates NBD Dubai Economy Tracker Index covers Dubai’s non-oil private sector economy.