The UAE non-oil private sector registered the fastest growth in two years in July as the IHS Markit Purchasing Managers Index (PMI) rose to 54.0 in July from 52.2 in June, according to media reports. A score above 50 indicates the sector has expanded. The growth was supported by rebounding demand and a sharp rise in new orders.
David Owen, Economist at IHS Markit, told the media, “UAE’s non-oil sector enjoyed a busy start to the third quarter of the year, as firms saw the sharpest rise in new orders for two years amid soaring domestic sales and strengthening market confidence. New orders from abroad disappointed again in July as sales were hindered by pandemic-related measures around the world. With COVID-19 cases reaccelerating in Asia, firms also pointed to a worsening of supply chain problems.”
The Covid-19 pandemic in other parts of the world led to another fall in export sales in July as firms started relying more on helping domestic clients recover new business. Additionally, business took more hits because of the lockdowns imposed in different parts of the world, especially in Asia where the increasing number of Covid-19 cases led to added restrictions. This also contributed to rising input costs.
The latest data shows that there is an increase in employment as the sales departments expanded. Even though the number is marginal, the rate of job creation was the fastest since January 2019.
Experts also mentioned that the future of business outlook for the non-oil sectors remained positive in July and surveyed firms expect economic conditions to improve as Covid-19 related restrictions are relaxed.