RIYADH: Non-oil business activities in the UAE improved in June, primarily driven by growth in output and new orders, reaching a four-year high, according to the data from an economy tracker.
The latest S&P Global Purchasing Managers’ Index report revealed that the UAE’s PMI rose to 56.9 in June from 55.5 in May.
“The ability of firms to secure increasing volumes of new business continued unabated in June, with the growth of new work actually accelerating to a four-year high,” said Andrew Harker, economics director at S&P Global Market Intelligence.
He added: “Some of this growth was predicated on the offer of discounts to customers, however, which may not be sustainable in the long term given that input costs are rising.”
According to the report, the rise in new orders was strongly supported by increasing customer demand and spurred by promotional offers to help secure sales.
The rise in business activities at the end of the second quarter of 2023 also increased employment opportunities.
The report, however, added that a modest increase in staffing levels and sustained growth of activity were still insufficient to prevent a build-up of backlogs of work, given the strength of the new orders.
“The extent of the inflows in new work was such that backlogs of work continued to rise in June despite a ramping up of activity, further job creation and an expansion of purchasing activity. This should, therefore, support further increases in staffing levels in the months to come as firms try to keep on top of workloads,” added Harker.
Egypt’s non-oil private sector contraction eases in June
Even though the contraction of the non-oil private sector in Egypt slowed down in June, it remained under pressure at the end of the second quarter, the PMI report showed.
According to the report, Egypt’s PMI increased to 49.1 in June from 47.8 in May.
“The Egypt PMI retained its upward momentum in June, rising closer to the critical 50 threshold that marks stabilization. At 49.1, the index reached its highest level for almost two years,” said Joe Hayes, principal economist at S&P Global Market Intelligence.
He added: “Behind June’s sustained uplift in the PMI were output and new orders, which similarly showed rates of decline softening amid reports from some survey members that demand conditions were beginning to show green shoots of recovery.”
The report further noted that inflationary pressures eased slightly in June and remained much softer than the peaks seen in January.
However, the level of employment dipped for a seventh consecutive month in June amid subdued confidence toward the 12-month outlook.
“An easing of inflationary pressures will also be welcomed. After the steep price increases seen at the start of the year, fewer companies are reporting such high-cost pressures. The overall rate of input price inflation cooled to a 16-month low during June, which led output charges to rise at a slightly weaker rate,” added Hayes.
The survey report further noted that price pressures, liquidity issues and weak demand drove total business activity volumes lower at the end of June.
According to the report, output and input fell in June at softer rates, while some companies saw an uplift in certain parts of the market.
