During June, non-oil private sector companies in Dubai saw an increase in new order volumes, as indicated by the Purchasing Managers’ Index released by S&P Global.
Business activities in Dubai experienced significant growth in June, with the expansion rate mirroring that of May. Additionally, the workforce numbers rose for the third consecutive month.
In terms of pricing, the latest data revealed that production costs rose for the seventh month in a row. However, the increase slowed down and remained modest, supported by a further decline in pressures from input costs. In fact, the rate of cost increases was the weakest seen in the past 18 months.
United Arab Emirates
The non-oil private sector in the UAE maintained its growth trajectory throughout June, bolstered by rising production levels and improved business activity.
The seasonally adjusted S&P Global Purchasing Managers’ Index climbed to 53.5 in June, up from 53.3 in May, indicating a notable improvement in the sector’s conditions, an acceleration in production growth, and stabilization in inventory levels.
Non-oil companies reported a strong rise in new orders, with many businesses citing sales driven by promotions and an increase in customer volume.
Firms in the UAE’s non-oil sector ramped up their production more than in the previous month. In fact, the gap between activity and sales growth significantly widened, which companies partly attributed to ongoing efforts to address long-standing capacity pressures.
Recent data suggested some success in this regard, as outstanding business recorded its slowest growth pace in 17 months, although the level of increase remained above the long-term average.
Companies continued to boost their purchasing activity in June, recording a slight uptick compared to May, which marked a 28-month low. This allowed businesses to avert further declines in their stock levels, with purchased input inventories remaining relatively stable after a record drop the month before.
Driven by the desire to ease outstanding workloads, non-oil companies increased their staffing levels in June. Employment rates rose during this period.
Input costs for non-oil firms increased at the slowest rate in nearly two years during June. The impacts of purchasing and labor costs were relatively mild, with procurement costs showing the slowest inflation rate since December 2023.
With cost pressures easing, companies reduced their selling prices for the first time in six months during June, though the rate of this reduction was marginal.
Looking ahead, firms in the UAE’s non-oil sector remained relatively cautious, despite a rise in confidence levels to their highest point since November of the previous year.
Expected growth in sales and the alleviation of geopolitical tensions were identified as key drivers of optimism, based on qualitative reports.