ABU DHABI (Reuters) -Growth in the United Arab Emirates’ non-oil private sector rebounded slightly in August on a faster expansion in output, but sales increased at their weakest pace in more than four years, a survey showed on Wednesday.
The seasonally adjusted S&P Global UAE Purchasing Managers’ Index (PMI) rose slightly to 53.3 in August from a 49-month low of 52.9 in July, remaining above the 50.0 mark that signals growth.
Competition and supply chain challenges were among reasons cited for the slowdown in sales growth in August, with the New Orders subindex falling to 53.1 from July’s 54.2, marking the lowest reading since June 2021.
“Sales growth weakened again in the UAE non-oil private sector in August, easing for the fourth month running,” said David Owen, Senior Economist at S&P Global Market Intelligence.
“The slowdown added to concerns of fading growth momentum and meant that output was increasingly reliant on backlogs of work.”
But output growth improved, reaching a six-month high, as companies reported increased activity due to ongoing projects and growth in local markets. However, purchases declined for the first time in more than four years, reflecting reduced stock positions amid softer demand.
There were increased cost pressures, with wage inflation reaching a 15-month high, while selling prices rose at the sharpest rate in five months, as firms passed on higher costs to consumers.
Overall, business confidence improved from the previous month, with firms expressing optimism about future growth due to stable domestic conditions and strong client relationships.
Dubai’s non-oil sector continued to grow solidly, with its headline PMI at 53.6 in August, up slightly from 53.5 in July, supported by the sharpest rate of expansion in output for seven months, the survey showed.
(Reporting by Reuters; Editing by Hugh Lawson)
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