UAE: PMI softens again in January; conditions still improve strongly
The S&P Purchasing Managers Index (PMI) slid marginally to a one-year low of 54.1 in January, down from Decembers 54.2. 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.
Januarys outturn was chiefly due to new orders growth moderating; more specifically, exports declined at the steepest rate since June 2021 due to weakening global economic dynamics. That said, new order inflows accelerated to a three-month high, which made firms onboard staff at a brisker pace than in December as they aimed to increase capacity. Meanwhile, output expanded at a joint 16-month low in January. Increased marketing and efforts to finish projects drove sales.
Turning to prices, input prices were broadly unchanged. This allowed firms to continue cutting output charges, on average, in January to try and attract more customers. Lastly, firms remained optimistic regarding the coming 12-month period; sentiment picked up marginally from Decembers 22-month low.