UAE business activity growth slows in May

However, "given the weakness affecting so many other emerging markets, the data is better still," says HSBC economist.

Growth of business activity in the UAE’s non-oil private sector slowed in May from a record high in the previous month as output expansion and new orders cooled slightly, a purchasing managers’ survey showed on Tuesday.

The HSBC UAE Purchasing Managers’ Index, which measures the performance of the manufacturing and services sectors, fell to a seasonally adjusted 57.3 points in May from 58.3 in April, the survey of 400 private sector firms showed.

It remained above the 50-point mark that separates growth from contraction.

“Output and new orders both continue to grow well, and the labour market is in rude health,” said Simon Williams, chief economist for the Middle East and North Africa at HSBC.

“These would be good numbers at the best of times. Given the weakness affecting so many other emerging markets, the data is better still.”

Output growth by UAE firms weakened to 61.0 points in May from 62.4 points in April, which was the strongest rate since the series started in August 2009. New orders growth eased to a nine-month low of 64.4 points.

Employment creation across the UAE’s non-oil private sector edged down to 54.0 points from April’s 54.7 points, which was the quickest pace since late 2009.

Suggesting some pressure on corporate profit margins, output prices fell deeper into negative territory, with the index hitting 49.0 points in May, while the rate of input price inflation edged up to 53.6 points.

Follow us on Twitter @Ind_Insights