For the second month in succession, business conditions have improved across the UAE and output and new business has increased.
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 re-opening of the economy, including the lifting of curfew measures has 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.
