UAE PMI Falls To 50.8 As June Hiring Contracts After Hormuz Disruption
S&P Global Market Intelligence said the UAE non-oil PMI fell to 50.8 in June from 52.6 in May, with employment contracting for the first time in more than four years. The survey cited client caution, sparse tourism activity and supply-chain disruption, but did not give company-level job cuts or revenue losses.
The UAE's non-oil Purchasing Managers' Index fell to 50.8 in June from 52.6 in May, S&P Global Market Intelligence said.
The survey recorded the weakest operating improvement since February 2021 while keeping the economy just above its 50 growth threshold.
Employment contracted for the first time in more than four years, according to S&P Global Market Intelligence.
The employment contraction came as companies reported weaker demand, rising costs and productivity drives after the Strait of Hormuz disruption.
S&P Global Reported UAE PMI At 50.8
The seasonally adjusted UAE PMI showed only marginal expansion in June.
Readings above 50 indicate growth and readings below 50 indicate contraction, according to S&P Global Market Intelligence.
The National reported that resilient domestic spending and public investment supported businesses at the end of the second quarter.
The article also cited geopolitical disruption, cautious client activity and competitive pressure as headwinds for the broader economy.
The labour-market contraction was among the sharpest since August 2020, during the Covid-19 pandemic, S&P Global Market Intelligence said.
The research firm linked the reversal in hiring to demand weakness, rising costs and productivity drives.
David Owen Cited Soft Demand And Cost Pressure
David Owen, principal economist at S&P Global Market Intelligence, said the drop in employment showed the effect of soft client demand and rising cost burdens.
He said new business growth remained mild because clients were delaying spending and tourism activity remained sparse.
Owen also said recent easing of regional tensions should help companies recover demand and normalise supply chains.
He pointed to greater shipping movement through the Strait of Hormuz in June as a reason delivery times shortened.
The survey still warned that the rebound may be gradual.
Owen said client caution had persisted and businesses had moved to cut staff capacity.
Strait Reopening Shortened Delivery Times
The June survey followed disruption from the US-Iran conflict and the closure of the Strait of Hormuz.
Hospitality, aviation and tourism were among the Gulf sectors hit hardest by the conflict.
The National said a US-Iran ceasefire in June reopened the strait to shipping and relieved some pressure on Gulf economies.
S&P Global survey respondents also pointed to construction projects, digital-services expansion and sales pipelines as pockets of strength.
Those pockets were not enough to remove broader weakness.
New business growth rose to a three-month high but stayed below its historical average, while survey panellists cited delayed customer spending, tourism weakness and elevated price pressure.
Dubai PMI Fell To 50.7
Dubai's non-oil private sector also expanded only slightly in June.
The Dubai PMI fell to 50.7 from 52.0 in May, the weakest improvement in the emirate's non-oil private-sector health since January 2021, according to the article.
Job losses in Dubai were the quickest recorded in five and a half years, according to the article.
Businesses also raised output, with the pace of output expansion increasing to the fastest rate since March.
Company-level layoffs, revenue losses, sector-by-sector job totals, named delayed projects or the value of supply-chain disruption tied to the June PMI decline remain outside the public record.
