UAE’s non-oil business activity picks up in April, S&P Global says

Business activity in the UAE’s non-oil sector expanded further in April, a survey by S&P Global showed Friday, however demand for new orders slumped due to the impact of the country’s worst flooding in the 75 years that records have been kept.

“April data highlighted strong overall growth across the UAE non-oil private sector as buoyant domestic economic conditions helped to support long-term business expansion plans,” said David Owen, senior economist at S&P Global Market Intelligence.

“However, the latest survey signalled a sharp slowdown in new business gains in the wake of heavy rainfall and flooding.”

The seasonally adjusted S&P Global UAE Purchasing Managers’ Index (PMI) dropped to 55.3 in April, the lowest reading since August 2023, and further eased from 56.9 in March, but remained above the 50.0 mark, which signals growth in activity.

The UAE PMI also continued the positive trend seen since December 2020.

S&P Global’s survey shows that the output sub-index increased slightly to 63.2 in April from 62.7 the previous month, reflecting strong domestic economic conditions and promotional initiatives, the impact of the rainfall was more acute in the pace of new orders growth.

New sales grew at the slowest pace since February 2023 with the new order sub-index at 56.0 in April, down from 61.5 the previous month as the heavy rainfall disrupted operations and weighed on sales, the study shows.

Respondents in the survey cited robust domestic economic conditions and the fruition of long-term business expansion plans, alongside competitive pricing strategies.

Furthermore, optimism regarding prospects for business activity growth in the year ahead remained highly upbeat in April, despite softening to a three-month low.

S&P Global said survey respondents attributed the optimism to buoyant market conditions and strong sales pipelines as well as a swift recovery from weather-related business disruptions.

Non-oil GDP represents about 74 per cent of the UAE’s overall GDP as the Emirates accelerates plans to diversify its economy away from reliance on oil revenues and attract foreign investment.

Read: UAE economy to grow by 5% in 2024, says S&P Global