UAE: Non-oil PMI stable in May
The S&P Global United Arab Emirates non-oil private-sector PMI remained unchanged in May from the previous month’s value of 55.3, marking the joint-lowest reading in eight months but remaining above the long-term average of 54.4. As a result, the index remained above the 50.0 no-change threshold, and signaled a stable improvement in non-oil private-sector operating conditions compared to the previous month.
Looking at the latest reading, there was a significant increase in backlogs of work, which reached unprecedented levels due to robust sales pipelines and the aftermath of April’s flooding. Efforts to recover led firms to boost their staffing levels and input purchasing, both reaching highs not seen in several months. Meanwhile, supply chain improvements were noted, with vendors delivering more quickly than in the previous month. These actions were taken in response to strong sales demand and the necessity to rebuild output levels, despite the growth of output slowing to a 16-month low.
Regarding prices, input costs rose the most in nearly two years, driven by higher fuel prices and wages. This surge in costs led to the quickest increase in prices charged by non-oil companies in over three years. Despite these inflationary pressures, business confidence improved in May, buoyed by expectations of stabilizing economic conditions, higher sales, greater profits, and increased promotional activities.