Non-oil business activity in the UAE grew at its slowest rate in nearly three years in July, as competitive conditions, rising price pressures, and capacity overloads affected performance, according to a survey released on Monday.
The seasonally adjusted S&P Global UAE Purchasing Managers’ Index (PMI) fell to 53.7 in July from 54.6 in June, marking its lowest point since September 2021.
The index was also below its long-term average of 54.4 but remained well above the neutral threshold of 50.0.
“The decline in the UAE PMI indicates that non-oil sector growth is on a downward trend in 2024. Not only is the index at its lowest point in nearly three years, registering 53.7 in July, but it has also lost momentum in four out of the last five months and fell below its long-term trend level of 54.4,” said David Owen, senior economist at S&P Global Market Intelligence.
Demand conditions remained favourable in July, with sales rising sharply, although to the smallest extent since April. Exports increased at the second strongest rate in nine months. However, intense competition led some firms to experience a drop in new order volumes.
The survey data indicated another sharp increase in business costs in July, with the rate of input price inflation—including material prices, wages, and overhead costs—rising at the fastest rate in two years.
Job creation also slowed to a six-month low in July.
Looking ahead, non-oil companies’ optimism about economic conditions over the next 12 months fell to its lowest level since January.
Dubai PMI
The Dubai PMI dropped to its lowest level in two-and-a-half years in July, falling to 52.9 from 54.3 in June.
Output growth eased slightly to its lowest point since September 2021, leading to a reduction in job creation.
