The growth of non-oil economic production in the UAE accelerated to its highest level in two years during July, with employment rising at the fastest rate since January 2019, according to the Purchasing Managers' Index (PMI) from IHS Markit. David Owen, an economic researcher at IHS Markit, stated that the non-oil sector in the UAE experienced a strong start to the third quarter of the year, as companies recorded the largest increase in new orders in two years amid rising domestic sales and enhanced market confidence. He added in a statement on Tuesday that production rose in July in line with this expansion; however, it was not sufficient to cover the backlog of work that increased to its highest level in 16 months. He noted that the PMI recorded 54 points in July, aligning closely with its long-term average, indicating that the economy had significantly returned to normal growth. However, many companies reported that production has not yet recovered to pre-COVID-19 levels.
According to IHS Markit, expectations for non-oil sector activity in the future were positive in July, as the majority of companies look forward to easing COVID-19 restrictions and the Expo 2020 later this year to improve economic conditions. Nonetheless, companies' forecasts declined for the first time in eight months.
Key data for July:
- The PMI rose to 54 points compared to 52.2 points in June.
- The production and new orders indices reached their highest levels since July 2019.
- Exports declined for the third consecutive month due to COVID-19 restrictions.
