UAE Growth Again Positive But Subdued In July - PMI

Daniel Fowler
August 6, 2020

Further substantial reductions in both activity and inflows of new work were recorded as ongoing lockdown restrictions stifled demand and forced companies to cease operations.

Moreover, the latest reading was among the lowest recorded in almost 15 years of data collection, surpassed only by the unprecedented falls in the previous three months.

Spain's services sector grew modestly for the second month in a row in July after a coronavirus lockdown decimated economic activity in April and May, but firms still shed jobs amid an uncertain future, a survey showed on Wednesday.

The PMI figures come after similar survey figures for United Kingdom manufacturers on Monday (3 August) showed new orders growing at the fastest pace since late 2018, with a continued rebound in activity. Unlike the previous month, the gauge for new export business dropped sharply into contractionary territory as the pandemic continued to hit other nations hard, dragging down overseas demand.

Respondents were therefore less optimistic about future output than last month, as concerns about the coronavirus and weak cash flow weighed on expectations.

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The final Jibun Bank Japan Services Purchasing Managers' Index (PMI) edged up to a seasonally adjusted 45.4 in July, hardly an encouraging change from 45.0 in June and a preliminary 45.2 reading. That's not surprising with lockdown measures still in force, but undoubtedly these will have to be loosened and companies reopen before the sector can move towards stabilization.

'Higher levels of service sector output were nearly exclusively linked to the reopening of the United Kingdom economy after lockdown measures and the subsequent return to work of employees and clients.

He added: "With such a prolonged and significant downturn, any substantial recovery will take many months, if not years".

Figures above 50 suggest most firms are growing and below 50 show decline on the closely watched index, based on a survey carried out by IHS Markit and the Chartered Institute of Procurement & Supply (CIPS).

Tim Moore, economics director at IHS Markit, which compiles the PMI index, said: 'UK service providers are starting to see light at the end of the tunnel after a record slump in business activity during the second quarter of 2020. The company delivers next-generation information, analytics and solutions to customers in business, finance and government.

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