UAE non-oil private sector mild growth unchanged in January -PMI

Andrew Cummings
February 4, 2021

Tim Moore, economics director at IHS Markit, said: "Service providers experienced a steep downturn in business activity due to the third national lockdown in January, although the speed of decline remains much slower than last spring". A level above 50 indicates expansion, while a reading below 50 signals contraction. But it should be noted that the PMI is a month-over-month indicator, showing improvement over the previous month, and not over the previous year.

Purchasing activity increased at the fastest rate in thirteen months.

The UK's vaccine success has sent business confidence to a six-year high despite January's lockdown hammering the services sector. A manufacturing PMI on Monday showed factory growth remained robust at the start of the year but the pace waned. The economic survey has estimated economic growth at 11 per cent for FY22.

"While the United Kingdom economy is on course to contract sharply during the first quarter of 2021, businesses remain confident that pent-up demand and an easing of pandemic restrictions will provide a springboard to recovery later this year", Tim Moore, economics director at IHS Markit, said. Marketing efforts, the reopening of some establishments and strengthening demand supported the increase in sales.

The launch of the coronavirus vaccine programme boosted optimism towards the 12-month outlook for output.

Input costs increased for the seventh straight month at the start of 2021, with monitored companies reporting higher prices for fuel and a wide range of materials.

"The main area of concern is the extent to which costs are rising across the services economy, with the rate of inflation remaining above trend despite easing from December", Lima said.

Commenting on the data, "a strong start to the year for manufacturing was accompanied by a marked upturn in the service sector, driving business activity growth to the fastest rate for nearly six years during January, said Chris Williamson, Chief Business Economist at IHS Markit".

AFPWhile survey respondents saw future output rising in the next year, "the degree of optimism was subdued and one of the weakest seen in the series history".

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