The seasonally adjusted Dubai Economy Tracker Index registered 54.9 in July, down from 56 in June.
The figure indicated a slower expansion in Dubai’s private sector that was below the long-run average, the report said.
At the sector level, construction companies reported the sharpest growth in July (56.9), followed by wholesale & retail (56.3) and travel & tourism (54.5) respectively.
However, all three sectors posted softer growth in July relative to June.
Khatija Haque, head of MENA Research at Emirates NBD, said: “While firms reported higher output and new orders in July, this was on the back of extensive price discounting, with average selling prices falling at the sharpest rate since January 2017.
“At the same time, input costs continued to rise, further squeezing margins. Against this background, it is unsurprising that employment growth so far this year has been the softest on record.”
The survey found that business activity increased in July, although the rate of expansion eased to a three-month low. Companies that reported higher output linked the increase to stronger inflows of new business.
Private sector businesses in Dubai reported a sharp improvement in incoming new work during July amid reports of robust domestic client demand and promotional activity. Construction companies reported the strongest expansion in new order books.
While firms hired additional staff in Dubai’s private sector – mainly in the construction sector, the rate of growth remained weak in the context of historical data, the report stated.
Input price inflation across Dubai’s private sector accelerated to a three-month high, reflecting higher wage and raw material costs.
Meanwhile promotional activity led to the greatest fall in selling prices across the private sector since January 2017. Price discounting has been recorded for three months running.
Looking ahead, the survey found that business activity expectations remained “strongly optimistic”, despite easing to a three-month low in July.
“Companies pinned hopes on new projects relating to Expo 2020 and successful marketing efforts,” the report added.