UAE non-oil private sector growth slows as inflation bites
The UAE Purchasing Managers’ Index (PMI) fell to 54.8 in June from 55.6 in May driven by the fastest rate in cost inflation in 11 years.
The seasonally adjusted S&P Global UAE PMI offers an overview of the business activity in the UAE non-oil private sector. A reading above 50.0 on the index indicates growth.
The report showed that the growth which remained positive for the 19th consecutive month, following the lifting of the Coronavirus restrictions, contributed to the significant increase in the volume of new orders in June.
21 percent of the companies that participated in the survey reported growth in the previous month, as well as a significant increase in new business from abroad.
Sales growth reached a six-month high in May but has since slowed to its lowest level since January.
The study committee attributed this decline to the impact of strong competition on customer demands, while some of the companies included in the survey indicated an increase in interest rates, which affected family and business spending.
Input costs in the non-oil sector rose sharply in June, with inflation reaching its highest level in 11 years. The rise in fuel prices was one of the main reasons for the rise in input costs.