UAE's private sector sees more orders in May, but jobs see another dip: IHS Markit
But more orders streaming in should inspire businesses to start recruiting again
Dubai: UAE’s private sector businesses are taking in more orders – but they are not yet increasing their workforce numbers. Employment numbers dropped in May for a fourth successive month.
But “with backlogs starting to rise and demand strengthening, it is hoped that businesses will start to raise their staffing levels soon to support overall growth," said David Owen, Economist at IHS Markit, the research firm that tracks country-specific spending by the private sector.
The majority of businesses kept employment numbers unchanged in May, but some cut staff levels due to cashflow issues, IHS Markit reports.
For May, the UAE’s non-oil economy made further recovery “midway through the second quarter”, led by domestic demand. Clearly, government efforts to spread the COVID-19 vaccinations and support key sectors helped with “rising confidence”, according to IHS Markit. While the overall new business growth was down from April, May's tally was "still the second-fastest since August 2019".
This is the sixth such reading in as many months. The index was down slightly from 52.7 in April and below the series average of 54.1.
Businesses will also have seen benefits start to add from lower cost inflation – for a second straight month. "Expectations for the upcoming 12 months climbed again in May, rising for the sixth month in a row to the highest since July 2020," the report notes. "Hopes of output growth were largely attributed to a recovery from the pandemic, with the Expo 2020 also cited. That said, the overall degree of optimism remained some way off the series average, as just 14 per cent of respondents were confident of a rise in output in the year ahead."