Dubai Business Conditions Worsen as Pandemic Weighs on Demand
Dubai Business Conditions Worsen as Pandemic Weighs on Demand
(Bloomberg) -- Business activity in Dubai dropped for a second month in November as the coronavirus pandemic continued to weigh on demand.
The non-oil private sector economy in the Middle East’s business hub deteriorated last month to the lowest since May, according to IHS Markit. Its Purchasing Managers’ Index dipped to 49 from 49.9 in October, falling further below the 50 mark that separates growth from contraction.
Employment figures continued to stabilize after having dipped to the lowest on record earlier this year and the pace of job losses was the mildest seen in nine months, though a possible lapse in demand could lead to another setback for employment in the short-term, the report said.
“A renewed fall in output and slower sales growth were evident across the Dubai non-oil private sector in November, highlighting the possibility of a ‘double dip’ economic downturn from the pandemic,” said David Owen, an economist at IHS Markit.
More from Dubai’s PMI report:
- Growth in new work was weakest in five months, leading to a reduction in output
- Sentiment for next year’s activity dropped to a new record-low in November amid heightened concerns over a slowing economic recovery; business expectations were negative for the first time in the series’ history
- Companies lowered output for the first time in six months “at a solid pace” noting the impact of Covid-19, while several reported a slower recovery since lockdown measures were lifted
- Demand weakness was prominent in the travel and tourism sector -- construction firms also struggling
Still, “news about effective vaccines could restore long-term optimism,” according to Owen, “as firms are likely to place greater hopes of a strong recovery in 2021.” Last week, the UAE registered China’s state-backed coronavirus vaccine and said it protected 86% of people against Covid-19 in trials.
©2020 Bloomberg L.P.