Growth in the UAE’s non-oil business activities experienced its weakest expansion in three years at the end of September, impacted by declining new orders and reduced employment opportunities.
The seasonally adjusted S&P Global UAE Purchasing Managers’ Index (PMI) decreased to 53.8 in September, down from 54.2 in August.
Declining Momentum in Non-Oil Sector
David Owen, senior economist at S&P Global Market Intelligence, stated, “The UAE PMI continued to show a loss of momentum in the non-oil private sector, with growth having softened considerably since the start of the year.” The softening of new order growth led to fewer hires, resulting in the mildest increase in total employment since late 2022.
While demand did boost output, business activity rose at its slowest pace since September 2021. However, non-oil firms reported a sharp increase in new business levels, driven by solid export sales and strong local market conditions.
Challenges and Input Costs
Business owners expressed concerns over competition affecting sales and noted that tougher market conditions prompted a cautious outlook. Input costs surged sharply in September, with high price pressures arising from transportation, machinery, technology, petrol, and labor. Nevertheless, the overall rate of cost inflation eased to its weakest level since April.
Dubai’s Performance
In contrast, the Dubai PMI indicated robust expansion in business conditions within the non-oil private sector for September. Overall activity levels rose at the fastest pace in four months, despite a slower increase in new business volumes. This expansion prompted non-oil businesses to increase staffing and inventories more significantly than in August.
