Kuwait and UAE Non-oil Sectors Show Mixed Growth in April: Kuwait PMI Dips, UAE PMI Remains Robust
In April, non-oil business activities in Kuwait grew despite a slight decrease in the Purchasing Managers' Index (PMI) to 51.5 from 53.2 in March.
A reading above 50 indicates growth, while below 50 signals contraction.
The decrease was attributed to cost-cutting measures such as reducing workforce numbers and purchase price inflation.
Job creation slowed down for the first time in eight months, and there was a buildup of work backlogs due to raw material shortages.
However, firms were still able to generate new business and output expansions at the start of the second quarter, according to S&P Global Market Intelligence.
In April, output prices in the industry grew moderately due to companies offering discounts to customers, but input costs surged sharply due to rising purchase prices.
This put pressure on margins and led firms to cut back on employment to control expenses.
Harker noted that this pricing strategy may not be sustainable and that companies are hoping for cost inflation to decrease or demand to increase to reduce the need for discounting.
Meanwhile, the UAE's non-oil private sector maintained strong output growth in April, according to a separate report by S&P Global.
The Emirates' PMI (Purchasing Managers' Index) decreased from 56.9 in March to 55.3 in April but still remained above the 50 mark, indicating expansion.
The slowdown was due to floods and rains in the country.
The survey showed overall growth in the UAE's non-oil private sector, but there was a sharp decline in new business gains.
Companies in Dubai were hit hardest by the loss of sales momentum due to weather disruptions.
Backlogs of work increased in April due to temporary business disruptions and pressure on operating capacity.
The UAE's non-oil businesses remain optimistic about future growth, but their confidence has decreased to a low not seen since January.
Despite this, businesses are upbeat about their growth prospects due to strong sales pipelines and a swift recovery from rainfall damage.
Employment levels increased in April due to new projects and resilient demand conditions.