Dubai private sector returns to growth in December but job cuts continue

Dubai private sector returns to growth in December but job cuts continue

Non-oil private sector companies in Dubai signalled a return to growth at the end of 2020, amid a strong rise in business activity and a faster increase in new work.

According to the latest IHS Markit Dubai Purchasing Managers' Index, employment numbers continued to fall as sentiment for the upcoming year was still subdued.

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Cost pressures were weak in December, supporting a further drop in selling prices, albeit at the slowest rate since May.

The headline IHS Markit Dubai PMI rose above the 50.0 no-change mark in December, posting 51.0 from 49.0 in November to indicate a modest expansion in the non-oil economy, and the first seen for three months.

The improvement in the headline PMI was largely driven by a sharp rise in business activity in December, after Dubai non-oil firms curtailed output midway through the final quarter. The rate of expansion was the second-quickest throughout 2020, bettered only by July's uptick.

David Owen, economist at IHS Markit, said: "An increase in output and new orders led to a renewed improvement in the health of the Dubai non-oil sector in December, shown by the headline PMI