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PMI: UAE non-oil industry grows steadily as regional tensions impact demand

A survey on Thursday showed that the UAE's private non-oil sector grew steadily during June, even though regional tensions affected demand and firms increased output to clear backlogs.

The S&P Global UAE Purchasing managers' Index (PMI), which is a seasonally-adjusted index, increased to 53.5 from 53.3 in June, indicating continued growth for the sector. However, new orders grew at their slowest rate in almost four years.

The subindex of new orders dropped to 54.5 from 56.2 in may, the lowest reading since Sept. 2021. The tensions between Israel, Iran and other countries dampened demand.

David Owen, senior economic analyst at S&P Global Market Intelligence, said that the impact of the conflict in Israel and Iran is mostly felt on demand, with some slowed down orders.

Owen stated that the impact of this on business conditions overall was minimal.

As firms reduced backlogs, output growth increased.

The supply chain continues to face challenges, as delivery times improve at their slowest pace for 14 months and input costs rise at the slowest growth rate in two years.

The survey found that non-oil companies in the UAE remained subdued about their business outlook despite the fact that the level of confidence has risen to its highest levels since November.

Dubai's headline PMI fell to its lowest level for nearly four years, to 51.8 in June from 52.9 in the previous month. This was due to a sharp decline in sales growth amid competition pressures and weaker tourist numbers. Business activity increased sharply and the number of employees increased for a third consecutive month. (Reporting and Editing by Hugh Lawson).

(source: Reuters)