Economy
Decade of Business Growth Ends in U.A.E. as Virus Raises Threat

(Bloomberg) — Business conditions in the United Arab Emirates worsened for the first time in over a decade as the virus outbreak in China risks further disruption to the Gulf nation’s trade and tourism.
Hurt by employment losses and a drop in new orders, operating conditions in the second-biggest Arab economy deteriorated in January, according to IHS Markit. Its U.A.E. Purchasing Managers’ Index, a snapshot of the country’s non-oil private sector, dropped to 49.3, crossing the threshold of 50 that separates contraction from growth.
“Key to the decline were firms’ efforts to reduce employment at one of the fastest rates on record in order to streamline costs,” David Owen, an economist at IHS Markit, said in a statement on Tuesday.
- Total new orders in the U.A.E. fell in January for the second time in three months
- Output didn’t grow for the first time in 10 years, according to IHS Markit
- Selling prices were reduced for the 16th month
- On a positive note, new orders from abroad grew for a third straight month
The federation of seven emirates, dominated by oil-rich Abu Dhabi and tourism and trade hub Dubai, is losing economic momentum in the face of challenges that range from geopolitical strains in the region to weak domestic demand. Authorities are counting on Dubai’s World Expo exhibition later this year to revive growth.
But the raging outbreak in China, the U.A.E.’s biggest trading partner, could become a major drag. With a rising death toll, thousands ill and much of China’s economy locked down, it’s already curbing travel and threatening global demand for oil. Gulf carriers Emirates and Etihad Airways were told this week to halt flights to all Chinese cities apart from Beijing.
“Dubai is the engine of non-oil sector growth in the U.A.E.,” Khatija Haque, head of Middle East and North Africa research at Emirates NBD, said in a Bloomberg TV interview.
The city relies heavily on transport, logistics and tourism — all of which have been harmed by the virus’s economic impact, “and will continue to be affected until the problem is fixed,” she said.
-
Banking & Finance1 week ago
Oman Arab Bank Announces Increase of Authorised Capital to RO500mn and Paid‑In Capital Boost of RO50mn
-
Renewables2 months ago
Jindal Renewables and OQ Alternative Energy Sign Joint Development Agreement to Advance Integrated Renewable Power Projects in Oman
-
Bahrain1 week ago
SPIEF 2025 focused on global and regional economic processes, market transformation, new tech, investment climate, financial policy and people
-
Alamaliktistaad Magazines1 month ago
Al-Iktisaad, May 25
-
OER Magazines1 month ago
OER, May 2025
-
Leaders Speak2 months ago
OERLive SPOTLIGHT: Oman Sustainability Week 2025 and Oman Petroleum & Energy Show
-
Business2 months ago
St. Petersburg International Economic Forum 2025 unveils its Business Programme
-
Banking & Finance2 months ago
Alizz Islamic Bank Partners with Al Tawasul Institute for Specialised Training Programme to Empower Job Seekers with Hearing Impairments