PMI Indicates Slower Growth as Job Creation and Selling Prices Fall.
Non-oil business activity in the UAE increased further in October, though at a softer pace, the S&P Global UAE Purchasing Managers’ Index pointed out. At 54.1, it stood slightly up from September’s 53.8, thus signalling a modest improvement in the health of the sector. Although growth was recorded, demand softened to its weakest level since February 2023, which caused job creation to weaken and selling prices to fall.
PC: Arabian Business
That number did a cue to him that non oil economy has passed the high point. “New business growth softened in October, added to signs of weakening the non oil economy,” said David Owen, S&P Global Market Intelligence Senior Economist. He further showed that the market competition was also the cause of decreased sales and employment, a factor that reached its lowest point in 30 months.
Despite these challenges, the business firms of UAE have remained optimistic on the prospects of growth. Non-oil companies experienced relief in part through some softening in the rate of inflation in input cost. Input costs also rose at the softest pace over a six-month period, each in the level of both purchase prices and wages. That has been somewhat of a relief. Companies have been able to keep profit margins without having steep price hikes.
While job recruitment did increase in October, the growth rate of employment was the lowest in 20 months. Falling sales and a decline in demand are further compounded by increased market competition as the main reasons behind the slow-down.
Dubai’s Non-oil Sector Slows Down Even Further
The Dubai non-oil sector also mirrored national trends of slowing down in October. The city’s PMI dropped to 53.2 from 54.1 in September, indicating slowdown in operating conditions. For the first time since April, average selling prices among non-oil firms in Dubai also eased off, and that was thanks to intense competition in the market, which meant businesses had to slash prices to stay alive.
Business and Consumer Confidence for New Orders Index Dubai Business Takes rose the smallest in January since their launch in the beginning of 2022, amidst increasingly challenged market conditions amid a significant jump in competing firms. On the whole, businesses and consumer confidence stood optimistic- they expressed continued activity as well as growth demand in new business, new sales over the following twelve months.
In conclusion, though the UAE’s non-oil sector did show a healthy growth in October, growth was recorded with signs of easing. The demand was found at lower levels with the rising competition and hence affecting hiring. And for the first time in months, a decline was noted in the selling price. However, input cost inflation too eased, at least giving firms heart as growth may yet prove sustainable during the coming month.
