According to a recent business survey, the non-oil private sector growth in the UAE slowed down slightly in May, although businesses remained optimistic due to improved operating conditions.
The S&P Global UAE Purchasing Managers’ Index (PMI), adjusted for seasonal factors, recorded a reading of 55.5 in May, dropping from 56.6 in April, but still indicating growth as it remained above the 50.0 mark. The report highlighted that the upturn was driven by more robust domestic demand and significant improvements in supply chains, leading to controlled cost pressures.
David Owen, a Senior Economist at S&P Global Market Intelligence, stated that the overall business conditions showed a robust improvement, with increased activity and new business. “Moreover, rising new work intakes and strengthening demand conditions gave firms greater confidence for the year ahead. The Future Output Index showed optimism rising to the highest level since October 2021, with firms pinning their hopes on projections that the strong run of demand momentum will continue.”
In May, the increasing inflow of new orders significantly strained business capacity, leading to a backlog accumulation that has been ongoing for nearly two years. Employment levels experienced the second-fastest growth rate since July 2016, according to Zawya News. Purchasing activity at non-oil companies showed a significant increase, albeit slightly lower than the previous month.
On the other hand, expectations for future output improved for the fifth consecutive month, reaching the highest level since late 2021, indicating growing confidence among firms regarding economic prospects.
