Dubai non-oil private sector growth slows in August - PMI

DUBAI (Reuters) - Dubai's non-oil private sector expanded marginally in August for the second straight month, although at a slower pace than in July as weak demand led to a sixth month of job cuts, a survey showed on Wednesday.

The seasonally adjusted IHS Markit Dubai Purchasing Managers' Index (PMI) slipped to 50.9 in August from 51.7 in July, nevertheless holding slightly above the 50 line denoting growth.

In June the index was at 50.0, emerging from three consecutive months of contraction.

"Dubai's non-oil economy saw a disappointing slowdown in growth in August, as the PMI fell for the first time since April," said David Owen, economist at survey complier IHS Markit.

"Firms have not seen a full-scale uplift in demand to pre-pandemic levels and many commented that market conditions remained strongly depressed."

The Middle East's trade and tourism hub relies on foreign visitors and shoppers for a large portion of its revenues and was hit hard by virus containment measures earlier in the year.

Output expanded for the third consecutive month in August, though at the slowest pace in that period, falling to 52.7 from 56.1 in July.

Employment contracted for the sixth straight month and was largely in line with the average in that period, falling to 46.0 in August from 46.8 in July, as companies continued to shed staff and cut employee costs.

"Business optimism weakened, with some firms expecting activity to improve but others citing that the unpredictability of the recovery could lead to business closures," Owen said.

The non-oil private sector in the United Arab Emirates, of which Dubai is a part, shrank in August for the first time since May, hit by record job cuts.

(Reporting by Yousef Saba; Editing by Hugh Lawson)