UAE non-oil private sector mild growth unchanged in January -PMI

DUBAI: Mild growth in the United Arab Emirates’ non-oil private sector was unchanged in January as business activity grew solidly and employment increased for the first time in over a year, although sales growth weakened, a survey showed on Wednesday.

The seasonally adjusted IHS Markit UAE Purchasing Managers’ Index (PMI), which covers manufacturing and services, was at 51.2 in January, steady from December when it rose above the 50.0 mark that separates growth from contraction for the first time since September.

While the reading marks the index’s joint-highest reading since August 2019, it signalled only a marginal improvement in business conditions from the end of last year and was well below the series’ average of 54.2.

“Compared to the results seen throughout 2020, the latest data indicated more favourable business conditions. However, with firms still having to make up lost ground from the COVID-19 lockdown, the pace of recovery so far appears subdued,” said David Owen, economist at survey compiler IHS Markit.

Output dipped slightly to 53.0 in January from 53.4 in December – which was a five-month high – but the pace of growth remained among the quickest since the downturn triggered by the pandemic began.

New orders grew for the third consecutive month but slipped compared to December and expanded at a softer pace than output.

Employment returned to positive territory for the first time since December 2019, with anecdotal evidence indicating that growth in new business and high numbers of candidates had encouraged some firms to hire.

“That said, the rate of job creation was only marginal, as other respondents continued with cost-cutting efforts,” the PMI report said.

While survey respondents saw future output rising in the next year, “the degree of optimism was subdued and one of the weakest seen in the series history.”