Dubai: The UAE’s non-oil private sector recorded its slowest growth since October 2016, with the purchasing managers’ index - a key reading of economic activity - at 54 in December from 55.8 a month earlier. The PMI number for the whole of 2018 was 55.5, slipping from 56.1 a year ago.
There has been little of new job creation last year, according to the Emirates NBD PMI data, despite “increasing new business”. The only uptick on the job front was a “marginal rise” in November.
The drop in the headline figure to 55.5 suggests a “broad slowing of growth across the non-oil private sector at the end of 2018”.
Output prices for businesses did not fall as quickly in December as in the previous month, which was the fastest pace recorded since the 2009 recession. “Domestic competition led to sales promotions, according to firms surveyed, and a slower pace of growth in new export orders suggests that most of the growth in new orders was domestically driven,” said Daniel Richards, MENA Economist at Emirates NBD.
Selling prices are now down for a third successive month.
But the fall in output prices was “mitigated somewhat by a slower pace of growth in purchase costs, which expanded at the slowest pace since August,” the report adds. But the squeeze on margins is apparent and continues to take a toll on headcounts and pay.
“Both employment and staff costs were broadly flat compared to a month earlier,” the report finds. Only 1.4 per cent of firms surveyed took on new staff while all respondents reported their staffing costs unchanged.
On the plus side, new orders have increased again, but slower than in November and at the weakest pace since August. The offering of discounts in a competitive marketplace reportedly contributed to rises in both activity and new business, the report said.