|Private sector economy growth lowest in more than 2 years
|UAE - 2019 January 10
The growth in the UAE's non-oil economy was moderate in December, expanding at its slowest level since October 2016, as output and new orders fell, according to a survey.
The seasonally-adjusted Emirates NBD UAE Purchasing Managers' Index, a composite indicator that gives an overview of operating conditions in the non-oil private sector economy, dropped to 54 in December from 55.8 in November, the lender said. A reading above 50 indicates expansion, while a reading below 50 signals contraction.
The latest expansion of business activity was solid overall as new orders increased again, but was slower than growth in November. New orders rose at the weakest pace since August. The offering of discounts in a competitive marketplace reportedly contributed to rises in both activity and new business, according to the survey.
Efforts to control costs discouraged companies from hiring additional workers at the end of 2018, despite increasing new business.
December data signalled a slowdown in the rate of growth in new export business. Although orders from abroad increased for the ninth consecutive month, the rate of expansion was the joint-weakest in this sequence.
Anecdotal evidence suggested that new export business had mainly been secured from clients in neighbouring countries, the survey said.
Companies generally remained optimistic that business activity will continue to increase over the course of 2019. Optimism was based on expectations of improving economic conditions and success in securing additional sales over the next 12 months.