Dubai: While the UAE's private sector is starting to see improved business activity, job losses are once again picking up and at an "accelerated rate", according to the latest IHS Markit findings.
The job losses were brought on as "backlogs declined", the report finds. The December readings of private sector's performance comes as a bit of a jolt - recent months had shown some stability returning to the job market.
"The jobs market continued to act as a drag on the sector, as employment fell again at the end of the year," said David Owen, Economist at IHS Markit. "Moreover, the rate of job shedding quickened, as cash flow shortages meant some firms were unable to pay for new staff."
Firms reduced their workforces in each month through 2020. "The latest fall came amid a drop in backlog - the fourth in consecutive months - although the pace of depletion slowed again from October's recent record," the report adds.
51.2The UAE's PMI (Purchasing Managers Index) in December - and the highest it has touched since August 2019
The biggest gains sighted in December came through increased orders, especially from other Gulf countries. But to win those orders businesses had to offer sizeable discounts.
“Notably, new export orders grew at the strongest rate in 15 months,” the report states.
According to Owen, "Rising output and new orders, particularly from abroad, were key drivers of the renewed improvement in non-oil business conditions in December. Notably, the PMI (Purchasing Managers Index) rose above the 50.0 no-change threshold for the first time since September, and was at its highest level since August 2019." (The PMI was at 49.5 in November.)
- IHS Markit's findings for December