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UAE's non-oil business activity marked growth in October, supported by expanding output but demand softened to its lowest since February 2023, resulting in weaker job creation and a drop in selling price, a business survey revealed on Tuesday.
At 54.1 in October, the seasonally adjusted S&P Global UAE Purchasing Managers' Index (PMI) signaled an improvement in the sector's health compared to 53.8 in September.
"A softening of new business growth in October added to signs that the non-oil economy is losing strength after a robust growth period in late-2023/early-2024," David Owen, Senior Economist at S&P Global Market Intelligence, said.
"Firms in the survey panel frequently indicated that crowding in the market was eating into sales, and hitting job creation which slipped to a 30-month low," he added.
However, firms are expecting growth to continue over the coming year thanks to a dip in the rate of input cost inflation. Non-oil firms reported the softest increase in overall input costs for six months with a slowdown recorded for both purchase prices and wages.
Firms were generally hopeful that activity and demand growth will be resilient, in part supported by strong sales pipelines.
Though job recruitments increased in October, the rate of growth dropped to its weakest level in 20 months due to reducing demand and falling sales triggered by market competition.
Dubai PMI
Non-oil companies in Dubai registered a slower improvement in operating conditions during October. At 53.2, the headline PMI was down from 54.1 in September.
Dubai non-oil firms posted a drop in average selling prices for the first time since April, linked to strong competition.
New business intakes rose at the softest rate since the beginning of 2022 because of tougher market conditions and increased numbers of competitors.
(Writing by Seban Scaria; editing by Daniel Luiz)
