DUBAI  - Growth in the United Arab Emirates non-oil private sector slowed to a four-month low in July, partly because of some weakness in demand, a survey of companies showed on Monday.

The seasonally adjusted IHS Markit UAE Purchasing Managers' Index (PMI), which covers manufacturing and services, fell to 55.1 in July, down from 57.7 a month earlier.

The non-oil sector remained firmly in growth territory -- figures above 50 indicate expansion and below that, contraction -- but the reading was the lowest since February.

"Rates of growth took a step back from those seen in the second quarter of the year," said Andrew Harker, associate director at IHS Markit and author of the report. The PMI averaged 58.2 in the second quarter.

Employment rose only marginally in July, while output growth slowed down to 63.1 from 66.8 in June.

Output prices were reduced for the tenth successive month while input prices were broadly unchanged.

"Companies were at least partly reliant on price discounting to secure new orders, suggesting some weakness in underlying demand. They were helped in this regard by a lack of cost inflation in July," said Harker.

Extended oil production cuts are lowering expectations for growth in Gulf economies.

The UAE, which has the most diversified economy in the region, revised downwards its expectations for economic growth in 2019, to 2% this year from 3.5% earlier, the central bank said in May. 

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(Reporting by Davide Barbuscia; Editing by Catherine Evans) ((Davide.Barbuscia@thomsonreuters.com; +971522604297; Reuters Messaging: davide.barbuscia.reuters.com@reuters.net))

 

Keywords: UAE ECONOMY/PMI