UAE non-oil economy growth remains strong despite competitive pressures, PMI data shows

UAE non-oil economy growth remains strong despite competitive pressures, PMI data shows

Dubai: The UAE non-oil economy continued to grow strongly in the beginning of the second half of 2023, as companies increased their activity levels significantly and reported more hiring and increased purchases of inputs. The robust output growth was accompanied by a sharp increase in sales, although at a slower pace due to competitive pressures. Companies were able to lower their selling prices again, aided by lower input cost inflation and sufficient inventory levels.

The seasonally adjusted S&P Global UAE Purchasing Managers' Index (PMI), a composite indicator designed to assess operating conditions in the non-oil private sector economy, decreased from 56.9 in June to 56.0 in July. However, it remained comfortably above the 50.0 no-change mark and the series' long-run average, indicating a significant improvement in the sector's health, supported by substantial output expansion.

Though the rate of activity growth slowed from June's recent peak, it was still considerable at the start of the third quarter, with about 30 per cent of survey respondents reporting a rise in output compared to less than 2 per cent reporting a fall.

The rise in activity was driven by an increase in new orders, which were still boosted by strong customer demand and improving market conditions,