Business conditions deteriorate for first time since 2009 in UAEChristian Fernsby ▼ | February 5, 2020
The new year brought a deterioration in the health of the UAE non oil private sector, latest PMI data showed, as new orders declined and output failed to grow for the first time in ten years.
Business in the Middle East Workforce numbers dropped at one of the strongest rates on record
Business expectations also weakened, though firms remained broadly upbeat.
The headline seasonally adjusted IHS Markit UAE Purchasing Managers' Index™ (PMI) a composite indicator designed to give an accurate overview of operating conditions in the non oil private sector economy dropped from 50.2 in December to 49.3 in January, falling below the crucial 50.0 no change mark for the first time since August 2009.
Overall, the headline index signalled a slight deterioration in business conditions.
Notable weakness was observed on the demand side again in January, with total new orders falling for the second time in three months.
Firms reportedly struggled to gain sales amid a slow business environment, in particular within the domestic economy.
Meanwhile, new orders from abroad grew for the third month in a row and at a faster, albeit modest, pace than in December as respondents commented on better conditions among trade partners.
As such, the drop in total new business was only fractional.
Nevertheless, firms responded by leaving output levels unchanged in January, ending a prior sequence of growth that had lasted for almost ten years.
While a number of companies restricted output due to lower sales, ongoing projects sustained activity at other businesses. ■