United Arab Emirates PMI January 2020

United Arab Emirates

United Arab Emirates: PMI plunges below 50 in January as conditions deteriorate for first time since 2009

February 4, 2020

The IHS Markit Purchasing Managers’ Index (PMI) slumped to 49.3 in January from 50.2 in December, marking the lowest reading since records began in August 2009. As such, the index dropped below the 50-threshold, indicating a deterioration in business conditions from the previous month in the non-oil private sector for the first time on record.

The overall reading was dragged lower by notable weakness in demand metrics: New orders fell for the second time in three months, weighed on by sluggish domestic business environment, while output levels remained unchanged in January, ending a near ten-year run of expansion. On top of that, employment nosedived on the back of cost-cutting strategies. On the price front, sales charges fell in the surveyed month, while input prices remained broadly unchanged, thus further squeezing operating margins.

However, the outlook seems slightly rosier, according to David Owens, an economist as IHS Markit, who commented:

"Looking ahead, it is hoped by many firms that the upcoming Expo 2020 will restore new business volumes and kick-start activity. Another bright note is growing momentum in export sales, which businesses have attributed to stabilisation in some international markets."

FocusEconomics panelists project non-oil GDP to increase 2.5% in 2020 before slowing slightly to 2.4% in 2021.


Author:, Economist

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UAE PMI January 20 20

Note: Emirates NBD Purchasing Managers’ Index. Readings above 50 indicate an overall increase compared to the previous month, and below 50 an overall decrease.
Source: Emirates NBD and IHS Markit.


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