UAE economy on recovery path
PMI DATA: POSITIVE IMPACT ON BUSINESSES AFTER CURBS EASED DASHBOARD TO MONITOR AND PREDICT VIRUS SPREAD IN DUBAI
The UAE economy is on the road recovery from the contraction in May as the country began to ease restrictions, according to the latest Purchasing Managers’ Index (PMI) data.
Greater freedom of travel also led to an easing of supply chain pressures, while input costs ticked up for the first time since February. The headline seasonally adjusted PMI — a composite indicator of operating conditions in the non-oil private sector economy — increased from a record low of 44.1 in April to 46.7 last month.
Several businesses were able to reopen and increase output due to easing of measures since last month, the PMI data said.
The positive data came the same day as malls in Dubai are back to operating at full capacity, with retailers expecting to get a clear feel of shopper sentiments this weekend. The simultaneous ramping up of office openings would also help, especially those malls that see a fair bit of office workers visiting them during weekdays.
Limited flights
Also, the UAE announced that airports would be allowed to operate limited flights for transit, repatriation of expats or return of residents or citizens. Dr Saif Aldhaheri, spokesman for National Authority for Emergency, Crisis and Disaster
Management, said: “The decision to suspend passenger flights to and from the country is still in effect.” The airlines will announce flights and timings starting today.
50% federal staff to return
The UAE government has raised to 50 per cent the capacity level of staffing at all ministries and federal authorities effective Sunday.
Meanwhile, the Dubai Covid-19 Command and Control Centre has collaborated with Smart Dubai to develop an innovative
digital dashboard to monitor and predict the spread of virus in the emirate. The dashboard collates and monitors crucial information on number of infections by type – asymptomatic, mildly symptomatic, moderately symptomatic, and severely symptomatic – cumulative numbers of infections, recoveries, and critical cases.
571 new cases, one death
The UAE yesterday confirmed 571 new coronavirus cases, one death 427 recoveries.
The UAE economy is showing signs of recovery from the contraction in May as the country emerged from its strictest lockdown measures, according to the latest Purchasing Managers’ Index data.
The PMI data for May from IHS Markit showed Output fell to a much lesser extent than April’s unprecedented pace, yet firms were still limited by a weak market environment and lower employment.
Greater freedom of travel meanwhile led to an easing of supply chain pressures, while input costs ticked up for the first time since February. The headline seasonally adjusted PMI, a composite indicator of operating conditions in the non-oil private sector economy — increased from a record low of 44.1 in April to 46.7 in May. “The change in curfew hours in May helped to lighten the impact on the UAE economy, PMI data suggests, with the headline index rising to 46.7 from a record low of 44.1 in April,” said David Owen, Economist at IHS Markit
Demand challenge
Despite reaching the highest in three months, the latest figure indicated a decline in business conditions. However, as several businesses were able to reopen and increase output due to lighter curfew measures, the rate of decline eased back from April’s record lows. Nevertheless, many firms highlighted that client demand remains, indicated by another lower new order volumes. Export orders also declined for the fourth month running, mainly linked to ongoing lockdown measures in GCC countries and other markets.
Data showed UAE firms continued to reduce employment numbers in May, although the latest fall was the softest since February. Businesses reported
46.7 UAE’s headline seasonally adjusted PMI for May
that excess capacity remained, whilst rising cost pressures led them to make further adjustments to salaries. As a result, staffing costs fell solidly and at the quickest pace in the survey’s history.
More positively, the partial lifting of travel restrictions allowed suppliers to make greater numbers of deliveries in May. Lead times continued to increase, but only marginally. Firms meanwhile looked to shore up stocks of inputs, linked to an expectation of a further lifting of lockdown restrictions in the UAE and elsewhere.
“Lockdown measures worldwide have notably reduced exports, as well as limiting input supply. However, May data suggested that these impacts are lessening as some countries move to lighter measures, said Owen.
Input costs increased for the first time in three months during May, attributed to rising raw material prices and a reported uptick in shipment charges.