UAE - Mubasher: The UAE’s seasonally adjusted Purchasing Managers' Index (PMI) was kept unchanged from April 2024 at 55.3 in May, according to the latest S&P Global PMI data.
The reading was still higher than its long-run average of 54.4, reflecting a robust improvement in operating conditions.
Non-oil companies recorded uplift in business levels during May, as robust sales pipelines and the lingering effect from April's flooding crisis put immense pressure on business capacity. However, the overall performance of private sector firms remained strong.
The survey data in May highlighted a pick-up in demand momentum after companies faced a slowdown in April due to floods.
Despite accelerating in May from April, the rise in total new orders was the second weakest since August 2023.
Additionally, the rate of business activity growth softened to a 16-month low, with some companies reporting a disruption in operations.
David Owen, Senior Economist at S&P Global Market Intelligence, said: "UAE non-oil companies continued to face relentless pressure on business capacity in May, as the latest PMI survey data signalled the largest-ever increase in backlogs of work."
"Although the uplift can be partly blamed on the country's record rainfall event in April and subsequent flooding, capacity pressures were already at historic levels in March amid robust sales pipelines and supply chain challenges due to the Red Sea crisis,” Owen added.
He noted: "The findings suggest that firms have a lot of work to do to get on top of their workloads, including rebuilding output levels, hiring workers and boosting inventories.
“Output growth dropped to a 16-month low however, with some firms commenting that their operations were still on hold,” the official added.
The economist highlighted: "As such, the focus for the next few months looks to be the recovery of the sector from this crisis. Nonetheless, with demand still strong, firms should be in a good position to resume their robust growth once capacity has been restored."
