The UAE’s non-oil private sector lost further growth momentum at the start of the fourth quarter of 2015, with business conditions improving at the least marked pace in two-and-a-half years, according to an Emirates NBD survey.
At 54.0, the headline Emirates NBD UAE Purchasing Managers’ Index (PMI) fell from 56.0 in September and was also below the average recorded since data collection began in August 2009 (54.6).
Underpinning the slowdown were weaker expansions in output and new orders, but the respective rates of increase were nevertheless robust overall.
Meanwhile, employment rose only modestly, as did stocks of purchases. On the price front, total input costs continued to increase solidly, while charges rose only marginally amid reports of competitive pressures.
Khatija Haque, head of MENA Research at Emirates NBD, said: “The October PMI data supports our view that activity in the non-oil private sector of the UAE has slowed this year, with average PMI in the first ten months of 2015 at 56.5, down from 58.1 in the same period last year.
“Although the impact on headline real GDP growth is partially offset by higher oil production, the latest PMI data supports our decision to revise down our 2015 growth forecast for the UAE to 4 percent (from 4.3 percent previously) in September.”
The overall loss of momentum was reinforced further by another modest rise in employment. The rate of job creation was muted in comparison with historical data and little-changed from the six-month low seen in September.
Data for prices signalled a moderation in cost pressures faced by UAE non-oil private sector companies. Both salaries and purchasing costs rose more slowly in October, with the respective index for the former pointing to only a modest rise overall.
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