UAE non-oil business growth slows to 22-month low in June

The corporate survey attributed some of the slowdown to Ramadan, which began on June 18

Business activity growth in the United Arab Emirates’ non-oil private sector slowed to a 22-month low in June, partly because of the start of the Muslim holy month of Ramadan, a corporate survey showed on Sunday.

The seasonally adjusted Emirates NBD UAE Purchasing Managers’ Index, which covers manufacturing and services, fell to 54.7 points last month from 56.4 in May. The 50-point level separates growth from contraction in the survey of 400 firms.

“Although the June PMI data was the softest in two years, it signals solid growth in the non-oil private sector,” said Khatija Haque, head of regional research at Emirates NBD.

She attributed some of the slowdown to Ramadan, which began on June 18 this year. Activity at many firms in the Arab world moderates during the month.

Haque said it was difficult to determine whether the softening would continue into the third quarter.

Output growth dropped to 57.5 points from 62.8, while new order growth fell more moderately, to 57.7 points from 60.9. Employment growth slowed only slightly.

Output price inflation turned marginally positive in June after four months of falling prices, while input price inflation slowed moderately to 50.9 points.