UAE: PMI softens again in December; conditions continue to improve robustly
The S&P Purchasing Managers Index (PMI) dropped marginally to an 11-month low of 54.2 in December, down from Novembers 54.4. Despite the downtick, the index remained well above the 50.0 no-change threshold, signaling a slightly milder improvement in non-oil private sector operating conditions from the prior month.
Decembers outturn was primarily due to output expanding at a softer pace. Additionally, new orders grew at the weakest rate in 15 months. The moderation was largely attributed to slowing demand abroad, which outweighed stronger domestic demand. As a result, new export business declined for the first time since August 2021. Meanwhile, job creation also slowed in December, increasing at an eight-month low pace. Turning to prices, improved input availability and the stabilization of labor costs led to yet another decrease in cost burdens. As a result, output charges decreased for the eighth consecutive month in December, partially due to firms efforts to attract customers through promotions. Lastly, firms were less optimistic regarding the outlook for the coming 12-month period amid concerns of slowing momentum; sentiment dropped to a near two-year low.