UAE non-oil companies experienced a surge in outstanding business levels in May, with the Purchasing Managers’ Index remaining unchanged but still indicating robust improvement in operating conditions. To meet demand, companies increased their labor force and purchasing activities, with input costs rising at the sharpest rate in nearly two years. Despite challenges from the floods and other crises, private sector firms saw strong output and new orders, although the rate of growth slightly slowed.
Demand momentum picked up in May after a slowdown in April, with new orders rising to the second-weakest level since August 2023. Backlogs of work increased at the fastest pace since the survey began in 2009, with price pressures intensifying due to higher input spending. However, vendors were able to deliver items more quickly, reflecting positive output projections for the future with hopes of stabilizing economic conditions and increased sales and profits.
The Dubai PMI dropped to its lowest level in 15 months in May, signaling a slowing of activity growth. New order growth saw a modest recovery, and supplier performance improved with lead times shortening. Inflationary pressures increased due to rising raw material and petrol prices, leading to the first increase in output prices in this period. Despite challenges, firms in the UAE remain optimistic about the future and are focusing on rebuilding output levels and boosting inventories to resume robust growth once capacity is restored.
