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Aden - Yasmine El Tohamy - UAE economy is projected to grow much faster this year than the last few years.
The UAE businesses are upbeat about 2020, pinning high hopes on stronger tourism and investment sectors in the country due to Dubai Expo, according to HIS Markit.
"Businesses expect 2020 to be a more upbeat year, amid forecasts of greater tourism and investment in the economy. This may be able to lift hiring activity, which has remained subdued throughout the past year or so," said David Owen, economist at IHS Markit.
Dubai Expo 2020, which will run from October 20, 2020 to April 10, 2021, is expected to attract 25 million visitors and generate business activity - mainly for tourism, hospitality, real estate and other sectors - worth billions of dirhams for the private sectors in this year and the next. Hence, the UAE economy is projected to grow much faster this year than the last few years.
Purchasing activity rose for the first time in three months during December. Firms related this to higher new orders and a depletion of input stocks, though the overall increase in input buying was only modest. Nevertheless, this spurred an improvement in vendor performance, as some firms reported placing stricter deadlines on deliveries.
The trend for employment remained subdued, with job numbers rising only marginally from the month before.
The HIS Markit UAE PMI slightly dipped to 50.2 in December from 50.3 in the previous month. The rate of improvement in business conditions was fractional and the slowest in decade-long sequence of growth.
However, purchasing manufacturing index (PMI) data showed that output growth was the weakest in December 2019 in the last eight years and new work is rising marginally. Selling charges continued to drop last month, putting further pressure on margins. Firms blamed strong competitive pressure in the sector that led them to offer discounts in order to retail customers.
"UAE businesses reported a weaker increase in activity during December, marking the third successive month in which the rate of expansion has softened. The latest upturn was also the slowest in over eight years, with panellists often noting subdued economic conditions," it said in a monthly note.
However, the rate of inflation was relatively mild, with some respondents noting higher raw material and fuel prices but little change to staff costs.
Output increases at slowest rate since September 2011
New business sees renewed upturn, but only slight
Inflationary pressures subdued as firms offer further discounts
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