Non-oil activities in the UAE in April slow sharply due to the floods, PMI – Markets shows

DUBAI: Growth in the United Arab Emirates’ non-oil sector fell to the lowest level in eight months in April, a survey showed, as companies felt the impact of the worst storms in 75 years on sales and production.

The seasonally adjusted S&P Global UAE Purchasing Managers’ Index slowed to 55.3 in April, the lowest since August last year, falling further from 56.9 but remaining well above 50, indicating growth.

While the Output sub-index rose slightly to 63.2 in April from 62.7 in April, reflecting strong domestic economic conditions and promotional initiatives, the impact of rain was greater on the pace of new order growth.

Sales of new products grew at the slowest pace since February 2023, with the New Order sub-index at 56.0 in April, up from 61.5 the month before, as heavy rains disrupted operations and weighed on sales.

Work backlogs also rose sharply due to bad weather, which had a significant impact on the country’s business and tourism hub, Dubai.

“Companies operating in Dubai recorded a particularly acute loss of revenue momentum as weather disruptions hit business and consumer spending,” said Tim Moore, chief economics officer at S&P Global Market Intelligence.

Oil falls to seven-week low

“Nonetheless, non-energy companies are still very optimistic about their growth prospects for the coming year. Many commented on strong sales pipelines and a quick recovery from the effects of heavy rainfall,” Moore added.

Companies remained confident about future production in the coming year, but optimism waned, falling to the lowest since January.

Non-oil GDP represents about 74% of the UAE’s total GDP, as the Gulf state accelerates plans to diversify its economy away from hydrocarbons and attract foreign investment.