Capacity constraints impacted non-oil business activity in the UAE in May, with production growth recording its slowest pace in 16 months.
show up Survey today, Wednesday Non-oil producing companies in the UAE hired additional workers in May, as the rate of job creation rose to its highest level in 3 months. Purchase growth also improved, reaching its highest levels since last November amid strong sales and production demands. Some reports indicated that companies were forced to compensate for goods that were damaged during the floods that occurred last April.
He mentioned Standard & Poor’s Global Purchasing Managers’ Index In the UAE, restrictions imposed on production capacity affected non-oil business activity in the UAE in May, with production growth recording its slowest pace in 16 months.
The seasonally adjusted Standard & Poor’s Global Purchasing Managers’ Index for the UAE reached 55.3 points in May, unchanged from April’s reading, which was the lowest since August of last year.
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The production sub-index fell to 60.8 in May, from 63.2 in April, the slowest growth rate since January 2023.
New sales growth rebounded in May, with the sub-index for new orders rising to 58.7 from 56 in April, but the rise represented its second weakest pace since August last year.
While demand momentum improved after record heavy rains stopped in April, survey respondents reported that sales volumes were slow to recover, and backlogs increased at the fastest pace since the survey began in 2009 due to production capacity constraints.
“The results suggest that companies have a lot of work to do to overcome their workloads, including rebuilding production levels, hiring workers and strengthening inventories,” said David Owen, chief economist at S&P Global Market Intelligence. Data for May indicate that hiring and purchasing efforts have actually rebounded, despite their impact on rising inflation pressures.
However, production growth fell to the lowest level in 16 months, with some companies indicating that their operations remain suspended. Accordingly, it seems that the focus during the next few months will be on the sector’s recovery from this crisis. However, with demand remaining strong, companies are well positioned to resume strong growth once production capacity is restored.”
Despite the slowdown in activity growth, optimism among survey participants about future production was clear, supported by stable economic conditions and rising sales, among other things.
