Sentiment continued to soften in the United Arab Emirates as a gage of company circumstances dropped to an eight-year low in the second-largest Gulf economy.
According to IHS Markit, shipments to overseas clients published a “stronger upturn” in an echo of conflicts that roiled global trade, and fresh orders stagnated in the U.A.E. in August. Its Purchasing Managers Index fell from 55.1 in July to 51.6, decreasing for the third month and edging near to the 50 limits separating contraction from development.
As indications of a manufacturing decline have appeared from Europe to Asia, fears of a worldwide downturn are deepening. Competitive domestic stresses compound the perspective for the U.A.E., a seven-emirate federation that encompasses oil-rich Abu Dhabi and the Dubai centre for tourism and commerce.
According to panellists interviewed by IHS Markit in the monthly publication, the increased market competition began to weigh on development, causing businesses to lower rates by most since April. Non-oil economy activity improved “at a significantly slower pace” relative to July, with lower supply curbing development, it said.
Meanwhile, recruitment slowed among U.A.E. companies, with jobs figures in the non-oil industry mainly stagnating. But at least for now, according to IHS Markit, next year’s World Expo in Dubai will help promote feeling.
“In August, the decline in activity development dampened company feeling, although the fundamental prediction remained powerful,” said IHS Markit economist David Owen in the study. “Many companies were optimistic that the industry will see powerful activity rates in the coming year with the coming Expo 2020.”