UAE - Mubasher: The UAE’s seasonally adjusted Purchasing Managers' Index (PMI) hit 56.6 in January 2024, lower than 57.4 in December 2023, according to the latest S&P Global PMI data.
This PMI marks the lowest reading for five months, while job creation registered the slowest rise since December 2022.
Meanwhile, the data underlined a sharp, yet slower, expansion in the UAE non-oil private sector due to rising new business inflows that led to a marked uplift in activity.
The rate of growth retreated to the least marked since August 2023. However, it was still much stronger than the long-run average since 2009.
Businesses elaborated that strong demand conditions contributed to driving new customers and higher sales. Nonetheless, UAE's non-oil businesses witnessed only a slight increase in their staffing levels during January.
The purchases of inputs continued to grow sharply due to higher shipping costs, as firms looked to reinforce their stocks and projected an increasing demand.
Regarding the year-ahead outlook, the confidence was positive and roughly on par with the 2023 average.
David Owen, Senior Economist at S&P Global Market Intelligence, said: "Whilst the UAE non-oil economy largely continued where it left off at the end of 2023, the PMI's dip to 56.6 in January pointed to a slight moderation of growth from the sector's best quarterly performance in four-and-a-half years.”
“More striking was a waning of employment growth to the weakest since December 2022, as strong demand and business optimism failed to translate into greater hiring,” Owen noted.
He stated: "The disruption to supply lines resulting from the Red Sea attacks appeared to have a modest impact on the UAE non-oil sector in January, with a few firms noting delivery delays, aggregate backlogs rising, and reports of higher shipping costs by survey respondents.”
“The impact on inflationary pressures so far has been notable but not severe, as input costs rose at a faster rate than in December but remained slower than in the preceding three months," the official highlighted.
