The UAE’s non-oil sector rose in April, but heavy rains impacted sales

The non-oil private sector continued to grow in April, although heavy rains in the country – the worst since records began in 1949 – disrupted business activity and affected sales.

The overall S&P Global Purchasing Managers’ Index for the UAE fell to 55.3 in April from 56.9 in March. In February, the index reached a nearly five-year high of 57.1.

Although PMI growth was the weakest since last August, it remained well above the neutral line of 50 that separates growth from contraction.

New orders rose last month at the slowest pace since February 2023, amid reports that heavy rains had disrupted business operations and affected sales, the S&P report said.

“April data pointed to strong overall non-oil private sector growth as buoyant domestic economic conditions helped support long-term business expansion plans,” said Tim Moore, economics director at S&P Global Market Intelligence.

“However, the latest survey signaled a sharp slowdown in new business growth due to heavy rains and flooding. Companies operating in Dubai recorded a particularly acute loss of sales momentum as weather disruptions hit business and consumer spending.”

The April 16 storm caused major disruptions as roads and buildings were flooded, transport services were disrupted and several businesses were forced to close.

People were stuck in offices and Dubai Metro stations, while passengers were also stranded at Dubai International Airport, which canceled flights due to the floods.

Poor weather conditions also contributed to a sharp increase in work backlogs, the PMI report found. Survey respondents said intense competition for new work resulted in falling average prices for the sixth month in a row in April.

The S&P Global Dubai Purchasing Managers’ Index also recorded a reading of 55.1 in April, down from 58.0 in March and the lowest in eight months.

“This was driven by a sharp slowdown in new business growth,” the report said.

More to follow…

Updated: May 3, 2024, 5:13 AM