UAE's non-oil private sector returns to growth in June

The UAE non-oil private sector returned to growth in June, as the country continued to lift restrictions implemented to stem the spread of the coronavirus. The headline seasonally adjusted IHS Markit UAE Purchasing Managers' Index (PMI) rose to 50.4 in June, from 46.7 in May.

"At 50.4 in June, the UAE PMI signalled the first stage of recovery in the non-oil private sector. More firms are now seeing an increase in activity as opposed to a decline, while new orders grew at the fastest rate in ten months,” David Owen, Economist at IHS Markit, said.

According to the IHS Markit report, output rose for the first time since December 2019 and levels grew at their strongest pace since October 2019.

New orders also rose at a solid pace, the fastest since August 2019, with client demand improving as the country exits lockdown.

"Despite this positivity, looking at the data over the past few months shows just how large a rebound in output is required to return the UAE economy to pre-COVID levels,” Owen said.

“Renewed growth in June marked only a slight reprieve from the downturn that reached its peak in April,” Owen added.

The report adds that despite the growth in sales, firms continued to lower employment during June in efforts to limit costs.

“The rate of job shedding accelerated from May to one of the quickest seen in the series history,” the report noted.

Purchasing costs rose for the second month in a row, partially due to higher demand for inputs.

 

Source: https://www.zawya.com/mena/en/economy/story/UAEs_nonoil_private_sector_returns_to_growth_in_June-ZAWYA20200705054647/

 

 

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