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Business conditions are still improving in Dubai, but at their slowest rate for 12 months as the growth in new orders waned, according to the latest Purchasing Managers’ Index (PMI).
The headline PMI for last month was 54.1, down from 54.5 in January, and while anything above 50.0 indicates growth, it was at its slowest late since February 2022.
The S&P Global Dubai PMI report for the month showed that four of the five sub-components of the PMI had a downward influence in February, partly offset by a mark-up in the output index, with the construction sector registering its strongest upturn since June 2019.
The output index reached a four-month high, showing a robust expansion in non-oil business activity in February, the report said, with firms that reported output increasing attributing it to new clients and ongoing projects.
The overall fall in the PMI largely stemmed from a slowdown in new business growth. In fact, new orders rose to the least extent since the beginning of 2022, though the rate of growth was strong overall.
“While many companies continued to see demand increase, others reported that competitive pressures had weighed on sales,” the report said.
Non-oil companies registered slower increases in both employment and inventories in February, and job creation was only mild overall, and the softest seen for five months, while stock levels grew to the least extent in the present seven-month run of expansion.
Firms also saw an increase in input prices following a broadly stable cost environment in each of the prior two months, the report added, with non-oil firms also benefitting from an improved supply chain performance.
David Owen, Senior Economist at S&P Global Market Intelligence, said the PMI reading was still indicative of a robust performance for the non-oil sector, as new orders and activity continued to rise sharply.
“Businesses were also more optimistic towards future output in February, reflecting confidence that demand conditions will continue to improve and avoid disruption from a weaker global economic climate,” he added.
“In addition, firms saw supplier delivery times improve sharply, with this index picking up to its highest level in three-and-a-half years.”
(Writing by Imogen Lillywhite; editing by Seban Scaria)
