Growth of business conditions in the UAE non-oil private sector continued to slow down, reaching the slowest rate in 16 months in June, mostly due to competitive pressures. 

The seasonally adjusted S&P Global UAE Purchasing Managers' Index (PMI) slid to 54.6 in June from 55.3 in May. However, companies noted a steep rise in new work during June, with the upturn edging up to the strongest since March.

"The UAE PMI highlights a slowing growth trend in the non-oil sector throughout 2024 so far, with the headline index having lost roughly three points since last December. Nevertheless, companies are still enjoying strong customer demand and robust sales pipelines, which are sustaining output expectations and driving purchasing activity," David Owen, Senior Economist at S&P Global Market Intelligence, said.

"The recent surge in backlogs of work is also showing signs of easing, a trend that is likely to continue as the country recovers from April's floods and supply chains adapt to the current situation in the Red Sea. Supplier lead times improved at the strongest rate for eight months, which will be a further boon for businesses," he said.

The rate of inflation ticked up to the highest seen in nearly two years. Firms struggled to absorb these cost increases, leading them to raise their selling charges for the second month running. Though modest, the rate of inflation was the fastest in over six years, as some companies opted to mark up their fees due to stronger customer demand.

Dubai PMI

The Dubai PMI continued to signal a moderating growth trend across the non-oil private sector economy. The headline index slipped to 54.3 in June, down from 54.7 in May.

Although new order growth remained strong in June and even accelerated, non-oil firms reported the softest increase in activity levels for nearly three years.

Input price inflation meanwhile ticked up in June. However, supplier performance improved sharply and job levels expanded in June.

(Reporting by Seban Scaria; editing by Daniel Luiz)
seban.scaria@lseg.com