Business conditions in the UAE deteriorated for a second straight month in November amid subdued demand, according to new research.
Non-oil private sector activity in the Gulf nation worsened last month partly due to the first decline in output since May, weak market conditions and lower customer numbers, according to IHS Markit.
Its Purchasing Managers’ Index was unchanged from October at 49.5, staying below the 50 mark that separates contraction from growth.
“The latest data signalled a renewed decline in output across the non-oil economy in the UAE during November,” according to David Owen, economist at IHS Markit.
“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.”
IHS Markit also reported that employment in the UAE fell last month at the slowest pace since February as some firms noted recalling previously-employed staff, while new orders grew “only slightly”.
Business confidence for growth prospects worsened with companies predicting a decline in output for the first time in the eight-and-a-half-year series history while demand conditions were subdued as recovery in activity after the Covid-19 lockdown stalled, while concerns about a renewed spike in virus cases intensified.
New business volumes registered a marginal uptick, although the increase was “only just offsetting the decline seen in the previous survey period”, the report noted.
It added that strict lockdown measures in Europe led to a fall in new orders from foreign clients while purchase prices dropped for the first time in five months, accompanied by a drop in staff costs.
IHS Markit also said that pressure on supply chains eased after a slight increase in lead times during the previous month.
Follow us on
