0243 GMT November 28, 2020
Non-oil private sector activity collapsed in Egypt last month and suffered another record setback in the United Arab Emirates, according to Purchasing Managers’ Index surveys compiled by IHS Markit. Business conditions in Saudi Arabia also remained below the threshold of 50 that separates growth from contraction, Bloomberg reported.
Egyptian “businesses lucky enough to remain open scaled back activity on a massive scale, as many highlighted sharp falls in domestic sales and foreign demand,” said David Owen, economist at IHS Markit. “Firms forced to close unsurprisingly recorded an even steeper decline in output.”
● Saudi Arabia’s PMI was at 44.4, compared with 42.4 in March; new orders and employment levels continued to decline
● IHS Markit’s gauge for the UAE dropped for the sixth month running to a record low 44.1 in April; export demand collapsed amid global lockdown
Factories are reeling from Asia to the US, a sign the global economic recovery from the biggest crisis since the Great Depression will likely be long and uneven. With the Middle East already coping with the damage inflicted by the pandemic, the outlook is also coming under strain from the rout in oil prices and production cuts by OPEC and its allies.
Saudi Finance Minister Mohammed al-Jadaan said officials were looking at “painful” choices and deep cutbacks to contain the fiscal damage — measures likely to hobble the private sector in a country where businesses rely heavily on government contracts. Authorities already announced a 50-billion-riyal ($13.3-billion) reduction in budget spending.