Dubai’s non-oil business is still expanding, but the rate of growth is slowing according to the S&P Global purchasing managers’ index.
Output and new orders were at their weakest since February, but both metrics saw expansions in new staff and inventories.
The seasonally adjusted S&P Global UAE Purchasing Managers’ Index, an indicator designed to give an accurate overview of operating conditions in the non-oil private sector economy, fell slightly to higher to 54.9 in November, from 56 in October, and was several points below August’s over three-year high of 56.7.
Dubai growth slowdown
Despite easing to the lowest since April, the index was indicative of a robust improvement in the health of the sector.
David Owen, Economist at S&P Global Market Intelligence, said: “The Dubai non-oil economy enjoyed another robust expansion in November, but there are increasing signs that the latest phase of growth in the emirate has now peaked.
“The PMI dropped to the lowest since April, as output and new orders both rose at the slowest rates for nine months.”
Output levels continued to expand sharply midway through the fourth quarter of the year, although the rate of growth softened slightly from October to a nine-month low.
Business activity mainly rose due to a further increase in new work, with some panellists also mentioning progress on current contracts and the positive impact of sports events such as the FIFA World Cup.
Dubai companies indicated a solid upturn in new business volumes in November, often highlighting an improvement in market conditions and new clients.
That said, in part attributed to increased competition, the rate of new order growth softened to the weakest since February. Slowdowns were noticeable in the travel and tourism and wholesale and retail categories, with the former registering the softest rise in new business for more than a year.
“While firms continued to enjoy increased demand, the global economic slowdown has begun to limit spending among clients, while some companies found that tight competition continued to make sales growth challenging,” said David Owen.
“On the plus side, inflationary pressures have clearly softened from earlier in the year, with firms commenting that higher fuel prices were largely offset by falling supplier charges for raw materials.”
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