PHOTO
Growth in the UAE’s non-oil private sector slowed for the second month in a row in December, as output and new business growth rose at the slowest pace in over a year, according to a survey released on Wednesday.
The seasonally adjusted S&P Global UAE Purchasing Managers’ Index (PMI) dropped from 54.4 in November to 54.2 last month, the lowest reading since January. Both output and new business growth eased to 15-month lows, while employment rose at the softest rate in eight months.
“The UAE PMI fell for the second month in a row… almost registering the lowest reading in 2022 and providing further signs that growth momentum has moderated from its post-pandemic peak in the third quarter,” said David Owen, economist at S&P Global Market Intelligence.
“While domestic demand conditions are holding up relatively strong, weakness in the global economy led to a first decrease in new export business since August 2021.”
Owen said businesses were also less upbeat that business conditions would be sustained in 2023, as expectations for the new year dropped to their lowest level since early last year amid global economic concerns.
“Businesses were less confident that output growth would be sustained in 2023, as year-ahead expectation fell to the weakest level since February 2021 amid concerns that economic problems abroad will seep through into the domestic economy,” Owen noted.
“On the positive side, firms enjoyed a renewed fall in their expenses as commodity prices moderated and input availability improved, which supported an additional cut to selling prices.”
With growth slowing down, businesses in the non-oil private sector also made fewer hiring last month.
“Job numbers rose at the softest rate in eight months and only marginally overall. Reduced hiring efforts added to capacity constraints as businesses saw a solid and accelerated increase in backlogs at work,” the survey said.
(Reporting by Cleofe Maceda; editing by Seban Scaria)
