UAE: PMI dips to a record low in December
The IHS Markit Purchasing Managers’ Index (PMI) was ticked down to 50.2 in December from 50.3 in November—the lowest reading since records began in August 2009. Nevertheless, the index remained above the 50-threshold which indicates an improvement from the previous month in the non-oil private sector.
In December, new orders rebounded modestly after falling for the first time in the series’ history in November. Moreover, output increased at the softest pace in approximately eight years in December, and likely the result of a subdued economic environment. Nevertheless, firms’ outlook on future operating conditions remained upbeat chiefly due to the upcoming Expo 2020. On the price front, input prices ticked up marginally, while output prices continued to decline.
Looking ahead, the non-oil private sector is expected to gain some momentum as solid fiscal support and Expo 2020 continue to underpin the non-oil private sector. Nevertheless, heightened regional tensions poses a downside risk to the outlook.