Growth in UAE non-oil private sector moderates to three-month low | ZAWYA MENA Edition

Growth in UAE non-oil private sector moderates to three-month low | ZAWYA MENA Edition:

July data from the Emirates NBD Purchasing Managers’ Index (PMI) for the UAE has been released and was compiled by IHS Markit, contains original data collected from a monthly survey of business conditions in the UAE non-oil private sector.

“The Emirates NBD Purchasing Managers’ Index (PMI) for the UAE declined to 55.8 in July from 57.1 in June, signalling the slowest rate of growth in the non-oil private sector in three months. Both output and new work, while still strong, were softer than in June. Notably, new export orders increased at the sharpest rate in three years, as firms reported stronger demand from other GCC countries and Europe. Employment was broadly unchanged in July, with the index barely above the neutral level at 50.2. Year-to-date, the employment index averaged 50.8, compared with 51.2 in the same period last year, and indicating even weaker job growth in the UAE’s non-oil private sector this year relative to 2017. Backlogs of work increased sharply again as a result of the strong rise in new orders (and flat employment), although the rate of increase in backlogs was softer than in June,” said Khatija Haque, Head of MENA Research at Emirates NBD.

Haque added that while input cost inflation remained relatively modest in July compared with earlier this year, firms continued to lower average selling prices, with output prices declining for the third month in a row. The continued squeeze on firms’ margins is likely a key factor in the soft employment survey, as firms remain under pressure to contain costs and boost efficiency.