UAE – Mubasher: Business conditions of the non-oil private sector in the UAE has witnessed a modest improvement August, with activity and demand growth easing for the third consecutive month, a survey by IHS Markit revealed on Tuesday.
The headline seasonally adjusted IHS Markit UAE Purchasing Managers’ Index (PMI) fell to 51.6 in August from 55.1 in July, marking its lowest reading in eight years, according to a press release.
The non-oil private sector has seen a marginal increase in activity last month as compared to in July, with weaker demand repressing the expansion.
Moreover, new orders rose last August with customer demand remaining healthy, while output marked the least rate over six years.
Panelists reported a soft growth in input purchases last month with sales to foreign customers registering a weaker upturn, which led to a marginal reduction in inventories of purchases.
In August, hiring activity contracted, ending a five-month period of soft increases in employment, the survey noted.
David Owen, Economist at IHS Markit, commented: "Latest PMI figures for the UAE non-oil private sector showed an easing from recent growth in activity. The headline PMI reading of 51.6 signalled only a modest improvement in business conditions, due to new order growth slowing for the third month in a row.
“Job numbers were broadly unchanged after five successive months of increases, while firms also looked to clear stock levels. Selling charges continued to fall, as competitive pressures remained heightened," Owen added.
Non-oil private sector firms attributed the decrease in employment levels to weaker inflows of new orders that enable them to keep on top of backlogs, with “outstanding business growing only fractionally”.
Furthermore, panellists reported that input prices and staff costs remained flat in August as compared to in July, while purchase prices have seen a marginal uptick.
"The dip in activity growth dampened business sentiment in August, although the underlying forecast was still strong. With the Expo 2020 coming, many businesses were positive that the market will see strong levels of activity in the coming year," Owen highlighted.
