Expansion of the United Arab Emirates' non-oil private sector slowed in July as employment growth dropped to a 27-month low, a survey of companies showed on Sunday. The seasonally adjusted Emirates NBD UAE Purchasing Managers' Index, which covers manufacturing and services, fell to 55.8 last month from 57.1 in June. A reading above 50 indicates expansion and below, a contraction.
Output growth slipped to 61.9 in July from 64.0 while growth in new orders fell to 60.6 from 63.0. Employment growth edged down to 50.2 from 50.4. Khatija Haque, regional economist at Emirates NBD, Dubai's largest bank, noted that year-to-date, the employment index had averaged 50.8 compared with 51.2 in the same period last year.
"While input cost inflation remained relatively modest in July compared with earlier this year, firms continued to lower average selling prices, with output prices declining for the third month in a row," she said. "The continued squeeze on firms' margins is likely a key factor in the soft employment survey, as firms remain under pressure to contain costs and boost efficiency."
However, Haque also said new export orders had increased at their sharpest rate in three years, as firms reported stronger demand from other countries in the region and Europe.
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