PMI Index declines to 54.6 in June from 55.3 in May.
DUBAI: The business conditions in the UAE non-oil private sector have shown a slowdown, with the growth rate reaching its lowest point in 16 months in June, primarily due to competitive pressures.
According to the seasonally adjusted S&P Global UAE Purchasing Managers’ Index (PMI), the index decreased to 54.6 in June from 55.3 in May.
Despite this decline, there was a notable increase in new work during June, reaching the strongest level since March.
Senior Economist David Owen from S&P Global Market Intelligence stated that there has been a slowing growth trend in the non-oil sector throughout 2024, with the headline index dropping by approximately three points since December.
Despite this, he said that companies are still benefiting from strong customer demand and robust sales pipelines, supporting output expectations and driving purchasing activity.
High inflation rates
The recent backlog surge is beginning to show signs of easing, a trend likely to continue as the country recovers from April’s floods and supply chains adjust to the situation in the Red Sea. Supplier lead times improved significantly, offering additional advantages to businesses.
Inflation rates rose to the highest level in nearly two years, posing a challenge for firms to absorb these cost increases.
Consequently, many have increased their selling charges for the second consecutive month. While the inflation rate was modest, it was the fastest seen in over six years as certain companies adjusted their fees in response to increased customer demand.
In Dubai, the PMI indicated a deceleration in growth across the non-oil private sector economy, with the headline index dropping to 54.3 in June from 54.7 in May. Despite strong new order growth, non-oil firms experienced the slowest increase in activity levels in almost three years.
Input price inflation rose in June, but supplier performance improved significantly, and job levels expanded during the month.
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