UAE private firms' hiring at over 3-year high as economy rebounds
PMI data shows business activity rising at the fastest pace since July 2019
According to a monthly survey released on Sunday, non-oil private sector companies in the UAE hired people at the fastest pace in the past over three and a half years in August as the economy rebounds strongly and companies report strong sales.
According to the headline seasonally adjusted IHS Markit UAE Purchasing Managers' Index (PMI), which gives an overview of operating conditions in the non-oil private sector economy, economic conditions saw solid improvement with business activity rising at the fastest pace since July 2019.
David Owen, an economist at IHS Markit, said PMI data signalled another robust rise in business activity across the non-oil sector in August, as demand continued to rebound from the pandemic.
"This increasingly fed through into firms' hiring decisions, with employment numbers ticking up at the fastest rate for more than three-and-a-half years," he said.
"There was also a slight pick up in supplier performance after six successive months of lengthening wait times for inputs. That said, the improvement was only slight, with several companies still finding that global shipping issues led to a delay in import arrivals and increases in raw material prices," he added.
With the outlook remaining positive, firms hope to gain investment from Expo 2020 and benefit from a general pickup in economic conditions.
"Firms continued to look forward to the Expo 2020 starting in October, hoping that this will drive investment and growth higher in the coming months. However, with the Covid-19 situation still uncertain, the outlook for future activity slipped again and was the least optimistic since March, said Owen.
The UAE PMI stood 53.8 in August, down from 54.0 in July. The reading also signalled the second-fastest improvement in the health of the sector for more than two years.
New orders rose for the sixth straight month as the business activity accelerated to the quickest rate of expansion since July 2019.
The survey results showed that domestic sales continued to gain ground, whereas export sales decreased for the fourth month in a row due to rising Covid-19 cases in some regions and difficulties with transporting goods due to shipping issues.
Meanwhile, despite shipping delays, the latest data hinted that supply-side conditions had started to improve. Overall delivery times shortened for the first time since the opening month of the year, although the rate of improvement was only slight.
The pace of inflation in the UAE eased from July but was still one of the quickest in the last three years.
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