Non-oil private firms in the UAE (United Arab Emirates) are cutting on employment at the fastest pace yet in almost 10 years, a new report revealed. The downward trend is attributed to troubled property markets and significantly lower oil prices.
A report produced by IHS Markit for Emirates NBD PJSC revealed that the employment tracker in UAE's NBD Purchasing Managers' Index (PMI) recorded a drop of 47.5 in February, Bloomberg reported.
The report further indicated that falling real-estate prices in Dubai saw a drop of around 22 percent since the end of 2014, pressuring jobs in private firms in the Emirates. Softer oil prices also contributed largely to the slowing employment rates in the region.
"Some firms reported operating with the minimum level of staffing in a bid to keep costs down," the report noted, adding that nearly 9 percent of the businesses surveyed revealed that employment numbers slipped compared to January records.
Saudi Arabia is leading the list of countries within the Emirates that recorded the lowest employment level in almost five years. Less than 1 percent of surveyed firms said they increased hiring for the workforce.
Emirates NBD's report was based on around 400 private sector firms, including services, construction, retail, and manufacturing sectors. According to The Peninsula Qatar, the study also attributed the recent employment slowdown to some foreign workers complaining about salary delays.
Competition is another factor that weighed in on private sectors in the UAE. With startups providing innovations and new business models, older companies are starting to feel the pressure of maintaining employment levels at an average rate.
Challenging market conditions impacted by trade tensions with other countries and regions are said to have taken a toll on jobs in private sectors outside the oil industry as weaker order inflows were recorded.
Dubai's property market has been struggling over the past months, multiple reports revealed earlier this year. In February, data compiled by Property Finder stated that 486 property firms in the country were unable to renew their licenses to practice last year.
According to Arabian Business, the compilation report revealed that the average number of real estate companies in Dubai dropped by 8 percent for the past two years. While some analysts find the fallen numbers a threat to private-owned businesses in the Emirates, others believe the reduced number of property firms is a "positive sign" as it could provide more space for growth among experienced providers.
