Weak demand hurts UAE non-oil private sector again in November: PMI

DUBAI: The United Arab Emirates' non-oil private sector contracted slowly in November for the second straight month, a survey showed on Tuesday, as businesses felt the continuing impact of the coronavirus pandemic.

The seasonally adjusted IHS Markit UAE Purchasing Managers' Index (PMI), which covers manufacturing and services, stood at 49.5 in November, unchanged from October and staying below the 50.0 mark that separates growth from contraction.

Output in the UAE's non-oil economy dropped for the first time since May, the survey showed, with firms saying this was due to a lower customer base and a slow return to normal activity after coronavirus-related lockdowns.


"The sector continued to suffer from weak demand which, despite partly recovering during the summer, is reportedly still much softer than prior to the COVID-19 pandemic," said David Owen, economist at IHS Markit.

Important sectors of the UAE economy such as tourism and transportation have suffered this year due to coronavirus restrictions. This was particularly hard for Dubai, which does not have the same oil wealth as its neighbour Abu Dhabi to cushion the impact of the crisis on its finances.

The International Monetary Fund has estimated the UAE economy will shrink by 6.6% this year, with Dubai posting a 9.8% contraction, outstripping a forecast 4.6% decline in Abu Dhabi.

Businesses have been shedding jobs in the UAE since the beginning of the year, although the rate of decline softened in November to its weakest since February, the survey showed.

"With the economy struggling to revive, job numbers once again declined, while businesses gave a negative outlook for the year ahead for the first time since sentiment data were first collected in April 2012," said Owen.