UAE non-oil private sector growth slows in July to three-month low, Emirates NBD says
Output and new work orders declined in July, the bank's latest Purchasing Managers Index shows
Business growth in the UAE's non-oil private sector slowed in July to a three-month low as output and work orders declined, leading to lower business confidence, according to a survey of companies.
Non-oil private sector growth fell to 55.8 points in July compared to 57.1 points in June due to a weak job market and lower selling prices in the last month, according to the Purchasing Manager's Index survey compiled by Emirates NBD and produced by IHS Markit, a financial information services company. A survey result above 50 is indicative of expansion while anything below points to a contraction.
“Both output and new work, while still strong, were softer than in June,” Khatija Haque, head of Mena research at Emirates NBD, said. “The continued squeeze on firms’ margins is likely a factor in the soft employment survey, as firms remain under pressure to contain costs and boost efficiency.”
Output growth declined to 61.9, a three-month low in July but the rate of expansion was “sharp overall" and above the survey's historical average, the survey said.
Growth in orders dropped to a four-month low but "remained solid" in terms of historical data.
Business confidence “eased slightly” in July from the record high in June, according to the survey. In July, businesses were less optimistic about the coming year than they were in May and June. However, more than 60 per cent of respondents said they expected their output to increase in the next year.
Export orders increased to their highest rate in three years, boosted by stronger demand from GCC and Europe, the survey showed. Year-to-date the employment index had averaged 50.8 compared with 51.2 in the same period last year, according to the survey by Dubai’s biggest bank by assets,.
Updated: August 12, 2018 01:27 PM