Reports based on IHS Markit’s latest index suggest that the United Arab Emirates (UAE) non-oil private sector which includes manufacturing and services grew to an index value of 50.4 in June compared to 46.7 in May, where a figure above 50.0 differentiates growth from decline.
The seasonally adjusted IHS Markit UAE Purchasing Managers’ Index (PMI), a summary of monthly surveys conducted among private sector companies is often considered as a barometer for economic progress in the region.
“At 50.4 in June, the UAE PMI signaled the first stage of recovery in the non-oil private sector. More firms are now seeing an increase in activity as opposed to a decline, while new orders grew at the fastest rate in ten months. David Owen, Economist Survey Compiler – IHS Markit
The Output levels have grown the quickest since October last year and new orders rose at a higher pace since August as demand improved after the easing of lockdown measures.
Despite the jump in the marquee index, companies are still considering cost cutting after months of weaker activity, which has led to a reduction in the employment sub-index to 46.4 from 48.7 in May.
“Evidence from panelists suggested that balance sheets remain in a tricky situation, as firms made another solid cut to workforces in order to reduce costs. Thus it may be a long path to recovery for the labor market,” Mr. Owen stated.
