05/08/2020 11:52 AST

The UAE non-oil private sector registered a further recovery in business conditions during July amid a greater easing of lockdown restrictions, according to data from the latest UAE Purchasing Manager’s Index.

The headline IHS Markit UAE PMI rose from 50.4 in June to 50.8 in July, to signal a second successive monthly improvement in business conditions. However, the rate of growth remained marginal and represented only a mild recovery from the downturn experienced by UAE businesses as a result of the COVID-19 pandemic.

Rising new business drove a solid upturn in activity. However, firms continued to lower employment in an effort to reduce payroll costs, while output charges fell at a sharper pace. The further easing of lockdown restrictions helped to improve customer demand and drive an upturn in new business at the start of the third quarter.

“UAE business activity continued to expand at a solid pace in July, as firms enjoyed another upturn in new work. The further reopening of the economy, including the lifting of curfew measures, helped to reinvigorate consumer spending. It was also particularly evident that future output sentiment depended on how demand recovered in the coming months,” said David Owen, Economist at IHS Markit.

Following June’s expansion, the latest increase was unchanged and solid overall. However, firms saw some weakness in sales to foreign customers with new export orders falling modestly, erasing the gains made in June.

The rise in total demand encouraged UAE firms to expand output again in July. The rate of growth was the fastest seen in ten months, albeit still signalling a relatively mild improvement since lockdown. According to survey respondents, the starting of new projects and an increase in marketing partly drove the rise in activity.

Weak hiring

Whilst output and new orders rose further in July, hiring intentions among UAE businesses remained weak as employment declined for the seventh month in a row. Firms were reportedly able to cover the rise in new work with existing workforces, as signalled by a stable level of backlogs. At the same time, company requirements to offset business costs led several respondents to cut payroll numbers.


Gulf News

Ticker Price Volume
Saudi Arabia’s private sector business conditions stabilise in July

06/08/2020

Saudi Arabia’s non-oil private sector stabilised in July signaling an improvement in business conditions at the start of the second half of 2020.

The latest Purchasing Managers’ Index (PMI

Gulf News

Oman’s mining sector revenues hit RO 114m in 2019

06/08/2020

Oman’s thriving mining and mineral processing sector earned RO 114 million in revenues last year, bolstered by a new Mining Law, strong regulatory framework and the industry’s positioning as one of f

Oman Daily Observer

United efforts, focus on needy key for recovery: Bahrain banker

06/08/2020

Banks in Bahrain must play a major role in helping the national economy recover from the global Coronavirus (Covid-19) pandemic and, to do so effectively, will need the ongoing support of all stakeho

Trade Arabia

Gulf pension funds need to drop cash

05/08/2020

Last week, the US Federal Reserve set interest rates at near zero, or 0.25 per cent to be precise, and which will add further complications to the Gulf’s financial services industry. This includes pe

Gulf News

New trade routes for Oman

05/08/2020

Last month I wrote a two-part column for Oman Observer titled, “How to launch an e-commerce marketplace in Oman”. The article was received particularly well as I was contacted by many entrepreneurs a

Oman Daily Observer