United Arab Emirates: PMI withers to a decade low in November
December 5, 2019
The IHS Markit Purchasing Managers’ Index (PMI) was ticked down to 50.3 in November from 51.1 in October—the lowest reading since August 2009. Nevertheless, the index remained above the 50-threshold that separates expansion from contraction in the non-oil producing private sector.
In November new orders declined for the first time in the survey’s history, as domestic firms rolled back order volumes—despite firms attempting to stoke demand by lowering output prices. The decline also came despite new export orders improving in November, contrasting the slight month-on-month fall in October. Output growth slowed in November, while employment levels fell slightly. Nonetheless, business prospects of future production levels continued to improve in November, hitting a four-month high. On the price front, input prices ticked up marginally, while output prices continued to fall.
Next year, the non-oil private sector is expected to gain some momentum as solid fiscal support, a dovish stance taken by major central banks and Expo 2020 continue to underpin the non-oil private sector. Nevertheless, heightened global economic uncertainty poses a downside risk to the outlook.
Author: Steven Burke, Economist