Heavy rainfall had a more severe impact on the pace of growth of new orders in the UAE, although the production sub-index rose slightly to 63.2 points.
The growth of non-oil business activities in the UAE declined in April to the lowest level in 8 months, as companies’ sales and production were affected by the repercussions of the worst storms the country has witnessed in 75 years, according to Standard & Poor’s Global Index For purchasing managers in the UAE.
The reading of the index, adjusted for seasonal factors, slowed to 55.3 points in April, the lowest reading since August of last year, but it remained above the 50 point level that separates activity from stagnation.
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Heavy rains had a more severe impact on the pace of growth in new orders, although the production sub-index rose slightly to 63.2 points in April from 62.7 in the previous month, supported by strong domestic economic conditions and promotional initiatives.
New sales increased at the slowest rate since February 2023, and the sub-index for new orders reached 56 points in April, down from a reading of 61.5 points in the previous month, after heavy rains disrupted operations and cast a shadow on sales.
The backlog of orders jumped sharply due to bad weather conditions, which particularly affected Dubai, the country’s business and tourism hub.
Tim Moore, director of economic affairs at Standard & Poor’s Global Market Intelligence, said: “Companies operating in Dubai recorded a particularly sharp decline in sales momentum after climate unrest harmed corporate and consumer spending.”
“Non-energy companies remain very optimistic about growth prospects next year,” Moore added. Many commented on the strong sales lines and quick recovery from the impact of the heavy rains.”
Business remained confident about production over the coming year but the level of optimism fell to its lowest reading since January.
The non-oil sector represents about 74 percent of the UAE’s gross domestic product, which is working to attract foreign investments and accelerate its plans to reduce the economy’s dependence on oil and gas.
