Hiring in UAE’s non-oil private sector slows further in June

Growth in the United Arab Emirates’ non-oil private sector slowed slightly in June, as purchasing activity and hiring softened during the month, according to the monthly Emirates NBD index.

The seasonally adjusted purchasing managers’ index (PMI) slipped to 53.4 in June, from 54 in May.

While the non-oil private sector still recorded growth, the latest figure was much lower than the average over the past three years (56.3).

Also read: UAE non-oil sector up but job market still a concern

Higher output and new orders helped business conditions improve, but the rates of growth were subdued compared to those seen over the course of 2014 and 2015.

The rate of output expansion – though lower than May’s eight-month high – was boosted by stronger marketing and healthy demand.

Meanwhile the upturn in total new business was also maintained in June mainly due to an expansion in exports.

However, employment barely contributed to growth of the non-oil private sector as a whole, the index found.

The rate of hiring was among the weakest recorded by the survey and marginal overall. This was in line with the near-stagnant trend seen over the second quarter.

Meanwhile backlogs of work increased for the sixth month in a row, the report added.

The pace of purchasing activity expansion – which had eased to a 56-month low in May – also saw muted growth.

Head of MENA Research at Emirates NBD Khatija Haque said: “The softening in new business and output growth in June may partly be due to the earlier start to Ramadan this year.

“Nevertheless, the output index remains relatively high and we continue to expect solid non-oil growth in the UAE this year.”

On the price front, total input costs faced by UAE non-oil private sector firms increased more quickly in June.

Both salaries and purchase prices rose at a faster pace, leading the overall rate of inflation to reach a nine-month high.

However, the rise in input costs was insufficient to push charges higher. Output prices fell for the eighth month running, the report added.