UAE’s non-oil private sector growth further eases in December
The growth of the non-oil private sector in the UAE further slipped in December, for the second consecutive month, as waning demand prompted an ease in output and new orders, the latest S&P Global report showed.
The deceleration in business activity dragged down the country’s Purchasing Managers’ Index to 54.2 in December from 54.4 in November.
Even though the PMI fell slightly, the global consultancy firm said it does not mean that business conditions in the UAE are deteriorating.
According to the S&P Global Index, readings above the 50-mark show growth, while those below 50 signal contraction.
“The UAE PMI fell for the second month in a row to 54.2 in December, almost registering the lowest reading in 2022 (54.1 in January 2022) and providing further signs that growth momentum has moderated from its post-pandemic peak in the third quarter,” said David Owen, an economist at S&P Global Market Intelligence.
He added: “The slowdown reflected downward movements in three of the PMI’s largest components, with output and new business growth both easing to 15-month lows, whilst employment rose at the softest rate in eight months.”
Owen further noted that weakness in the global economy has led to a first decrease in new export business since August 2021.
According to the S&P Global report, the new orders subindex fell to 55.5 in December from 55.7 in November, while the employment index also eased, down to 50.6 last month from 51.5 in November.
“The broad slowdown in growth led non-oil firms to make fewer additions to staffing in December. Job numbers rose at the softest rate in eight months and only marginally overall,” said S&P Global in the report.
The report explained that reduced hiring efforts among non-oil companies resulted in an accelerated increase in backlogs of work.
Reflecting the softer demand outlook, firms were less optimistic about future activity in December, while expectations fell to their lowest since early 2021, the report pointed out.
However, the non-oil economy in the UAE witnessed a renewed decrease in overall cost burdens, driven by improved input availability and a stabilization of wage costs.
Meanwhile, S&P Global, on Tuesday, revealed that Saudi Arabia’s job numbers witnessed their strongest growth rate since January 2018, as non-oil companies witnessed a sharp expansion in business activity driven by robust market demand and business intake.
According to the Riyad Bank Saudi Arabia Purchasing Managers’ Index report, the Kingdom’s headline PMI stood firmly above the 50.0 no-change mark at 56.9 in December 2022 — a slight decline from November when the index hit 58.5.