UAE - Mubasher: The UAE’s seasonally adjusted Purchasing Managers' Index (PMI) declined to 54.6 in June 2024 from 55.3 registered during May, according to the latest S&P Global PMI data.
Non-oil private sector continued to retreat at the mid-point of 2024 despite another firm improvement in the sector's performance. The reading also highlighted competitive pressures, weaker job creation, and a subsequent easing in output growth, which was the softest recorded since February 2023.
Companies witnessed a steep rise in new work during June, with the upturn hiking to the strongest since March.
Meanwhile, the month registered increased demand levels, alongside the acquisition of new clients.
Backlogs of work continued to surge at the end of the second quarter (Q2) after May survey data signalled a record accumulation due to the enduring impact of both the country's floods and the Red Sea crisis.
The non-oil companies faced a sharp rise in input costs during June, with the rate of inflation going up to the highest seen in nearly two years
Looking ahead, UAE non-oil companies’ optimism ticked lower but was among the best observed in the past four years.
David Owen, Senior Economist at S&P Global Market Intelligence, said: "The recent surge in backlogs of work is also showing signs of easing, a trend that is likely to continue as the country recovers from April's floods and supply chains adapt to the current situation in the Red Sea.”
“Supplier lead times improved at the strongest rate for eight months, which will be a further boon for businesses,” Owen added.
He underlined: "On the negative side, input price pressures are at their strongest for nearly two years, causing firms to raise their output prices for the second month in a row.”
The economist indicated: “With reports of swelling competition in some sectors, firms are keen to retain their competitive edge, which makes the latest uptick in prices even more indicative that businesses are feeling the pain on their balance sheets and having to protect their margins."
