DUBAI: Growth in the United Arab Emirates’ non-oil business sector eased to its lowest level in eight months in April, a survey showed, as companies felt the impact of the country’s worst storms in 75 years on sales and output.
The seasonally-adjusted S&P Global UAE Purchasing Managers’ Index slowed to 55.3 in April, the lowest reading since August last year, and further easing from 56.9, but remained firmly above the 50 mark, signalling growth.
While the Output sub index increased slightly to 63.2 in April from 62.7 the previous month, reflecting strong domestic economic conditions and promotional initiatives, the impact of the rainfall was more acute in the pace of new orders growth.
New sales grew at the slowest pace since February 2023 with the New Order sub index at 56.0 in April, down from 61.5 the previous month as the heavy rainfall disrupted operations and weighed on sales.
Backlogs of work also rose sharply due to the adverse weather, which significantly affected the country’s business and tourism hub of Dubai.
“Companies operating in Dubai recorded a particularly acute loss of sales momentum as adverse weather disruptions hit business and consumer spending,” Tim Moore, Economics Director at S&P Global Market Intelligence.
“Non-energy businesses are nonetheless still highly upbeat about their year ahead growth prospects. Many commented on strong sales pipelines and a swift recovery from the impact of heavy rainfall,” Moore added.
Businesses remained confident about future output over the next year but the degree of optimism eased, slipping to its lowest reading since January.
Non-oil GDP represents about 74% of the UAE’s overall GDP as the Gulf state accelerates plans to diversify its economy away from hydrocarbons and draw foreign investment.