The private sector in the UAE is growing at the slowest pace in 6 months
A survey showed today, Thursday, that the growth of the non-oil private sector in the UAE slowed down last January to the slowest pace in 6 months, despite registering an increase for the 14th consecutive month.
The seasonally adjusted IHS Markit Purchasing Managers’ Index in the UAE fell to 54.1 points in January from 55.6 points in the previous December, its lowest reading since last July. , but in line with the average reading since August 2009.
The specialist survey showed that the private sector lost some momentum in January due to a rise in Omicron infections that hampered demand growth.
David Owen, an economist at IHS Markit, which conducted the survey, said: “The latest data has further strengthened this foothold, but may have shown the first indications that growth is slowing down.”
The production sub-index – which measures the activity of companies – fell to 59.6 in January from 62.7 last December, stopping continuous growth over a period of 4 months, and recording its slowest rate since last September.
The employment sub-index also declined slightly, and remained near the 50-point level separating growth and deflation, affected by inflation fears, but it continued the growth streak for the eighth consecutive month.
The growth of new orders continued last January, despite the slowdown to below average, supported by the World Expo, which will be hosted by Dubai until the end of next March.
But other companies said that they witnessed a decline in demand amid an increase in Covid-19 infections due to the outbreak of the mutated Omicron strain of the Corona virus, as well as increased competition.
Non-oil Emirati companies cut production prices for the sixth month in a row last January, and purchase costs rose for the 14th month in a row.
Expectations for future production also improved for the first time in 3 months, as 17% of companies expected production growth over the next 12 months, while 2% expected a decrease.
The PMI is based on 5 main pillars; These are new orders, inventory levels, production, supplier delivery volume, and the employment and work environment.