UAE employment rate drops ‘sharply’ in February: ENBD

The rate of employment in the UAE's non-oil economy fell at the sharpest rate in at least nine and-a-half years in February, according to the latest Emirates NBD UAE Purchasing Managers’ Index (PMI) survey.

Overall, the PMI Index declined to a 28-month low of 53.4 in February - down from 56.3 in January, showing "a solid improvement in business conditions, but one that was weaker than the series average".

A score above 50 indicates growth in the non-oil economy, while a score below 50 indicates contraction.

While the survey said that the slowdown in growth reflected challenging market conditions and competitive pressures, new orders also rose at their slowest rate since October 2016, and companies responded by reducing staff levels.

The survey's employment index fell to 47.5 last month, as nine percent of respondents reported lower month-on-month headcount, and only 1.5 percent reported increased hiring.  

"Some firms reported operating with the minimum level of staffing in a bid to keep costs down. Staff costs were broadly unchanged last month, again reflecting a relatively soft job market," said Khatija Haque, head of MENA research at Emirates NBD.

Seasonally-adjusted selling prices weakened at their fastest rate in the survey's history, although input cost inflation was only marginal. Business confidence fell sharply, with around half of survey respondents stating, "activity is likely to either remain unchanged or decline over the next year", the bank said.