UAE non-oil Industry Growth Strong Amid Rising Price Pressures

The non-oil private sector growth in the UAE stayed consistent in July, yet it recorded its weakest advancement in nearly three years. The Emirates' PMI decreased to 53.7 in July from 54.6 in the previous month due to competitive conditions, increasing price pressures, and capacity overloads affecting performance, as per the S&P Global Purchasing Managers’ Index.

In July, the index stayed firmly above the 50 expansion mark, even though it was still below its long-term average of 54.4.

David Owen, chief economist at S&P Global Market Intelligence, said: “The drop in the UAE PMI is a further signal that non-oil sector growth is on a downward trend in 2024.”

He added: “Business capacity remained one of the key challenges facing the sector, as indicated by another steep uptick in backlogs as firms struggled to resolve supply and administrative issues.”

Abdulla bin Touq, UAE Minister of Economy, mentioned in March that the Emirates' economy is projected to increase by 5% in 2021, due to a strong growth in the non-oil industry and a rise in foreign direct investment.

The minister also mentioned that the non-oil economy in the UAE makes up 73 percent of the country's GDP. As per the S&P Global report, price inflation sped up in July, with companies facing the quickest increase in input costs in a span of two years.