UAE’s non-oil business growth slows in August but confidence high-PMI By Reuters

UAE’s non-oil business growth slows in August but confidence high-PMI By Reuters

© Reuters. FILE PHOTO: A general view of a construction site of a new development in Dubai, United Arab Emirates, June 13, 2023. REUTERS/Abdelhadi Ramahi/File Photo

DUBAI (Reuters) – Growth in non-oil business activity in the United Arab Emirates eased in August to the slowest pace in six months, but business confidence rose to its highest since before the pandemic, a survey showed on Tuesday.

The seasonally adjusted S&P Global UAE Purchasing Managers’ Index slowed to a reading of 55.0 in August from 56.0 in July. That was its lowest level since February, although it remained well above the 50.0 mark indicating growth in activity.

The output subindex indicated continued strong expansion in activity although it slowed to 61.9 in August from 62.8 the previous month and was the lowest since January.

David Owen, senior economist at S&P Global Market Intelligence said that while the improvement in operating conditions was sustained in August, momentum has waned since the four-year peak hit in June.

“That said, most PMI indicators continued to give positive signals, including uplifts in input purchases, inventory building, job creation and improving supply chain conditions,” Owen said.

The pace of expansion in new orders remained healthy with the subindex at 57.6, similar to July, driven in part by improving economic conditions, greater household spending and increased customer numbers according to the survey.

Among the Gulf’s most diversified economies, the UAE has been developing its non-oil sectors, with a focus on trade, tourism, manufacturing and logistics, and financial services, among other areas.

The UAE’s non-oil GDP grew 4.5% in the first quarter according to preliminary estimates disclosed by the minister of economy last month, outperforming the overall GDP growth of 3.8%.

The latest PMI survey showed that business confidence was strong with the index at its highest since March 2020, the survey said, with strong economic growth prospects boosting optimism.

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