Dubai’s non-oil private sector activity has recorded a slowdown in activity, as per the latest survey by HIS Markit Dubai Purchasing Managers’ Index (PMI).
With Dubai slowly bouncing back from the coronavirus crisis, the seasonally adjusted PMI declined to 49.9 in October from 51.5 in September, thereby falling below the 50mark level, which separates growth from construction.
This reading indicates an end to the growth trend in the third quarter of this year, as the non-oil private sector registered its slowest growth in past five months.
The decline in growth was noticed in the construction sector due to lack of new building projects, and in the travel and tourism sector, due to weakening tourist numbers, revealed David Owen, Economist, IHS Markit.
“Growth in the wholesale and retail sector was the softest in five months, signalling a broad-based slowdown across some of Dubai’s key sectors,” David said.
Given, the diversified economy, which is dependent on sectors such as tourism, real estate, transportation, trade and financial services, Dubai has been badly hit by the pandemic this year.
According to the IMF (International Monetary Fund), the economy of the emirate may constrict to 9.8 percent this year, and S&P Global Ratings predicted a 11 percent contraction.
To cut costs, firms continued to slash jobs across the private sector, with the rate of contraction having gained pace in September, which fell to lower levels than noticed in the previous six months, the IHS Survey revealed.
“Businesses also showed weaker optimism towards the economic recovery from Covid-19 amidst reports of weak demand and uncertainty about the future impact of the pandemic on activity and jobs. In fact, the overall level of confidence was the weakest in the series’ eight-year history,” David pointed out.