The UAE’s non-oil private sector added new businesses at the slowest pace last month since September 2021 amid signs that concerns of a global slowdown had weighed on sales and confidence, a business survey showed on Wednesday.
The seasonally adjusted S&P Global UAE Purchasing Managers' Index (PMI) fell to 54.4 in November from 56.6 in October, and is at the lowest since the beginning of the year. However, any reading above 50.0 indicates expansion in activity.
"The UAE PMI fell back from its post-pandemic highs to a ten-month low in November, pointing to a slowdown in growth across the non-oil economy," said David Owen, economist at S&P Global Market Intelligence.
"That said, the headline reading of 54.4 suggests that UAE businesses are still enjoying robust growth, a feat that is becoming more difficult to achieve in the global economy," he added.
The drop in the headline index was mainly caused by a softer rate of new business growth in November, the report said.
The softening in growth across the sector impacted purchasing and employment in November. Input buying rose at the slowest pace since August, with growth softening markedly from October's over three-year high.
UAE companies reported a modest increase in staff numbers during November, and one that was softer than October's recent high. With sales growth also slowing, backlogs of work rose at the softest rate for ten months.
"Confidence about future output fell to its second lowest for 15 months, leading firms to pull-back hiring growth from its recent high," said Owen.
Those surveyed also said input cost eased as some raw materials saw price corrections. As a result, total input costs rose only marginally. On the flip side, fewer companies reportedly offered discounts to clients.
Meanwhile, the companies' outlook was the second-weakest since August 2021. Output expectations slid to a three-month low on the back of weaker sales growth, as some firms said that slowing global demand conditions could disrupt growth patterns over the next 12 months.
(Writing by Brinda Darasha; editing by Seban Scaria)