UAE non-oil private sector growth slows as inflation bites -PMI

A basic view of Jumeirah Seaside Residence (JBR) in Dubai, United Arab Emirates, February 2, 2022. REUTERS/Abdel Hadi Ramahi

DUBAI, July 5 (Reuters) – Enterprise exercise within the United Arab Emirates non-oil non-public sector retreated to its slowest tempo in 5 months in June although progress remained optimistic for the nineteenth consecutive month, a survey confirmed on Tuesday.

The seasonally adjusted S&P International UAE Buying Managers’ Index (PMI) fell to 54.8 in June from 55.6 in Could, its lowest stage since April as inflation weighed on the non-oil economic system.

A studying above 50.0 on the index signifies progress.

Inflationary pressures are widespread throughout the UAE’s non-oil economic system, in line with the PMI information, with sharp rises in gasoline costs driving up prices for companies within the oil-rich nation.

Purchases slowed down and stockpiling was diminished as enter prices rose at their quickest tempo in 11 years, the info confirmed.

“UAE companies got here beneath elevated stress from rising enter prices in June, as a surge in gasoline costs drove the quickest price of value inflation in precisely 11 years,” stated S&P International Market Intelligence economist David Owen.

“The ratio between the Enter Value and Output Value Indices was the very best on document, signalling that value rises for patrons are probably within the coming months.”

Nonetheless, the outlook for future exercise stays optimistic regardless of the issues that inflation will hit spending.

Output, which measures enterprise exercise, fell to 60.7 in June from 62.5 in Could, ending two consecutive months of accelerating progress to hit its slowest since February.

The employment sub-index rose marginally to 51.2 from 50.7 a month earlier, its highest stage since August as companies added capability. Some employers have needed to provide larger wages to rent and retain workers as common wages rose to their highest in 4 years.

The brand new orders sub-index continued to broaden for the sixteenth consecutive month, although had been decrease than the prior two months, whereas output costs fell for a second consecutive month, which was the strongest decline since November final yr.

(This story removes extraneous phrase from headline)

Reporting by Alexander Cornwell; Modifying by Catherine Evans

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