Dubai Business Conditions Improve as City Emerges From Lockdown
Dubai Business Conditions Improve as City Emerges From Lockdown
(Bloomberg) --
Business conditions in Dubai showed signs of picking up in June as the city reopens after a lockdown to contain the spread of the coronavirus.
Non-oil private sector activity in the Middle East’s business hub improved for the first time since February, according to IHS Markit’s Purchasing Managers’ Index. The gauge rose from 46 in May to 50 last month -- the mark that separates contraction from growth.
“Business activity was back in positive territory as firms were given a welcome boost from the relaxing of lockdown measures,” said David Owen, an economist at IHS Markit. “Some sectors were on the path back to normality, according to survey respondents, though others presented a more cautious picture, finding that demand in some areas, notably travel & tourism, was still extremely weak.”
- Firms continued to lower employment, with payroll numbers decreasing sharply.
- Output grew for the first time in four months at “a solid rate,” and business expectations turned positive for the first time since March.
- Supplier prices increased during June, leading to a slight uptick in overall expenses at non-oil private sector firms.
- Confidence strengthened for the second month and businesses were optimistic about activity growing over the coming year, but they were still much weaker than prior to the onset of the coronavirus.
Economies across the world are starting to show signs of rebound as most countries begin to chart a path of recovery from the economic damages caused by the pandemic. The United Arab Emirates, of which Dubai is a part, has lifted its overnight curfew and reopened its borders. The nation’s virus tally dropped to 445 new cases on Wednesday from a May peak of over 900.
“Firms direly need a boost to cash flow, as many have been left struggling with low revenues and high cost burdens in June,” according to Owen. “Workers have been hard-hit, with employment dropping sharply for the fourth month in a row.”
©2020 Bloomberg L.P.