UAE - Mubasher: The seasonally adjusted Purchasing Managers' Index (PMI) of the UAE fell to 53.3 in May 2025 from 54 in April, marking its lowest reading in four years.
The index remained above the 50 no-change mark, highlighting an improvement in operating conditions across the non-oil private sector, according to the latest S&P Global PMI data.
Strong demand led to an increase in output, although the growth rate trended down from its recent bullish run. However, the upturn was the slowest seen for 28 months.
The improvement was attributed to favorable demand conditions, good relationships with clients, new marketing strategies, and diverse product ranges.
Moreover, the reading reflected a decline in input stocks, as firms looked to streamline holdings amid slowing momentum.
The survey indicated that higher sales led to increased activity amid global economic uncertainty, which was linked to US tariffs.
Firms recorded a softer rise in input prices, with inflation decelerating to its lowest since December 2023. Selling charges increased for the fifth month running.
Hence, employment growth was the strongest seen in exactly one year, backed by elevated workloads, as rising new orders contributed to another sharp increase in backlogs of work.
Optimism eased to its lowest since January, with nearly 10% of companies projecting an expansion in the year ahead.
David Owen, Senior Economist at S&P Global Market Intelligence, said: "UAE non-oil firms signaled that growth had slowed in May, as the headline PMI fell to its lowest point since September 2021.”
"From an overall perspective, the survey signals that the UAE economy is performing well, but the softer increases in output and new orders hint at momentum easing,” Owen added.
He stated: “The sharp cutback in stocks (which was the fastest on record) and the broadly subdued outlook for activity suggest that firms are gearing up for softer growth.”
"Positively, the survey data backs up the trend of falling inflationary pressures, as businesses saw input costs rise at their slowest rate since the end of 2023,” the economist noted.
