Business conditions took a turn for the worse in the three biggest Arab economies, a deterioration accompanied by job losses that accelerated to a record pace in the United Arab Emirates.
After having stabilized in July, a measure of non-oil private sector activity in Saudi Arabia, Egypt and the UAE worsened in each country last month and was below the threshold of 50 that separates growth from contraction, according to Purchasing Managers’ Index surveys compiled by IHS Markit.
In the UAE, business sentiment for the next 12 months fell to the lowest in the series history.
- The headline reading for the UAE showed the first drop in operating conditions in three months, falling to 49.4 in August from 50.8 in July
- Saudi Arabia’s PMI retreated to 48.8 from 50, driven by a “solid drop” in new business after the kingdom’s tripling of value-added tax depressed consumer demand and continuing efforts to stop the virus
- The IHS Markit Egypt PMI was at 49.4, down slightly from 49.6 in July; firms saw increases in output and new orders, but “job losses remain strong”
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