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The performance of the non-oil private sector in the UAE slowed down during the month of May.
The purchasing managers’ index for the non-oil private sector in the UAE, issued by S&P Global on Monday, decreased to 55.5 points in May, compared to 56.6 points recorded in April.
In May, the index recorded its lowest level in 3 months, but it still indicates an improvement in the performance of the non-oil-producing private sector, above the neutral level of 50 points.
The UAE, one of the largest oil producers, seeks to increase the contribution of the non-oil private sector to the gross domestic product, as part of the economic diversification plans.
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David Owen, economist at S&P Global Intelligence, said in the report that although the index fell from a six-month high it had recorded in April, the May reading indicates “a strong improvement in business conditions, driven by a marked uptick in activity and new business.”
Sales volume in May rose sharply, while new business volume increased at a slower pace than in April. New business growth was only driven by domestic demand with export sales flat.
Improved demand conditions in the local market helped keep cost pressures low, according to the report.
In May, companies expanded stockpiling of production inputs, while sales prices continued to decline, albeit at a slightly weaker pace than in April.
According to the report, strong competition in the market has prompted companies to offer lower prices to customers.
Employee numbers rose in May, at the second-fastest pace since July 2016.
With regard to the future outlook, expectations towards the next year improved for the fifth month in a row, and reached the highest level since orlate 2021.
(Prepared by: Shaima Hefzy, to communicate with zawya.arabic@lseg.com)
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2023-06-05 04:22:24
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