The growth of business conditions across Dubai’s non-oil economy slowed down further in January, reaching a 11-month low, but overall growth remains robust due to a rise in new orders and output, according to a business survey.

The S&P Global Dubai Purchasing Managers’ Index (PMI) score is 54.5, down from 55.2 in December, and its lowest since February 2022, but still well above the 50.0 threshold which indicates growth.

The PMI report said rising demand and stable input costs encouraged increases in employment and inventories, whereas average selling prices continued to fall.

“These developments were partly supported by an improving supply chain environment, as delivery times shortened to the greatest extent since September 2019,” the report said.

The index dropped for the fourth time in five months, but non-oil companies continued to indicate a strong demand environment in January, with numerous reports of higher customer orders, increased advanced bookings and new projects commencing.

Business activity levels continued to rise sharply at the turn of the year, although like new orders, the pace of expansion was the second-weakest for 11 months. The rate of job creation was just shy of October’s near three-year high, the report added.

Some companies said they had cut prices to strengthen sales, and while there was robust increases in both activity and demand, non-oil companies stayed relatively muted about the 12-month business outlook in January.

Optimism towards future activity remained lower than the long-run series trend, with just 11% of panellists expecting growth amid hopes of higher new orders.

David Owen, senior economist, S&P Global Market Intelligence, said: “Dubai companies continued to benefit from relatively benign supply side and pricing conditions. Delivery times improved at the strongest rate in three-and-a-half years, whilst overall input costs were largely unchanged following a slight drop in December. These factors helped firms to increase their headcounts and boost inventory levels.”

(Reporting by Imogen Lillywhite; editing by Seban Scaria)