DUBAI (Reuters) - The United Arab Emirates' (UAE) non-oil private sector shrank at a record rate for the second month running in April, as lockdown measures to fight the coronavirus pandemic piled pressure on an already sluggish economy.
The seasonally adjusted IHS Markit UAE Purchasing Managers' Index (PMI), which covers manufacturing and services, fell to 44.1 in April from 45.2 in March. The 50.0 mark separates expansion from contraction.
The output and new export orders sub-indices fell sharply, both falling to record lows since the survey began in August 2009. Output tumbled to 39.9 in April from 47.2 in March.
"Shop closures and restrictions in domestic and international travel had huge repercussions on new business, which fell at an unprecedented pace after also declining sharply during March," said David Owen, economist at survey compiler IHS Markit.
"Business sentiment reached the lowest in nearly three years, reflecting heightened uncertainty from the COVID-19 crisis. While firms on balance remain optimistic of growth in the coming year, some panelists were apprehensive, noting that the risk of an economic downturn was increasing," Owen said.
As of May 3, the UAE had reported 14,163 cases of the novel coronavirus and 126 deaths, the highest number of deaths after Saudi Arabia among the six Gulf Cooperation Council countries.
The authorities have imposed strict lockdown measures to stem the spread of the virus, including a 24-hour curfew in Dubai that was eased in late April as the Muslim fasting month of Ramadan began.
Malls, dine-in restaurants and cafes in Dubai, the country's business and tourism hub, were allowed to resume operations with limited capacity. This week, malls in the capital Abu Dhabi began to reopen and Sharjah followed.
But travel, tourism and trade, major contributors to the economy, both remain largely at a halt.
"Tourism declined sharply again, as countries worldwide imposed similar restrictions amid the virus pandemic. Along with reduced demand from foreign clients, this led to a steep fall in export business, one that was unprecedented in the survey history," the report said.
New export orders fell to 35.2 in April from 44.3 in March.