Business activity growth in the United Arab Emirates’ non-oil private sector slowed in September, with jobs growth falling to a six-month low, a corporate survey has showed.
The seasonally adjusted Emirates NBD UAE Purchasing Managers’ Index, which covers manufacturing and services, fell to 56.0 points last month from 57.1 in August. A level above 50 indicates expansion.
September data saw higher output and new orders remaining the key drivers of overall growth, supported by further rises in employment and input stocks.
That said, the rate of hiring eased to a six-month low at the end of Q3, while growth of total new work was undermined by the first drop in foreign orders since May 2010. On the price front, a sharper rate of cost inflation was reflected in a renewed increase in output charges.
Khatija Haque, head of MENA Research at Emirates NBD, said: “The strength of total new order growth is particularly encouraging, given the remarkable weakness in export orders last month, and in our view underlines the strength of domestic demand in the UAE even against a backdrop of low oil prices.”
Underlying data suggested that sharp rises in both output and new orders contributed to the strong performance of the sector as a whole. Despite easing slightly since August, the respective rates of expansion remained above their historical averages.
However, the expansion in total new orders was restricted by a fall in new export work during September. The latest decline was only slight, but it was the first seen in nearly five-and-a-half years. Some companies attributed weaker new business from abroad to greater competition.
Job creation was sustained in September, amid further growth of new business. That said, the latest increase in staffing levels was only modest overall, and the weakest since March.