UAE non-oil private sector growth hits four-year low
Ski Dubai at Mall of Emirates
Dubai - Growth rates for output and employment also eased, though stocks of pre-production items increased more quickly.
The start of 2016 signalled another loss of growth momentum at UAE non-oil private sector firms, with business conditions improving at the weakest rate since March 2012.
Underpinning the slowdown was a relatively subdued rise in new work, which was linked in turn to a near-stagnation in new export business.
Growth rates for output and employment also eased, though stocks of pre-production items increased more quickly. On the price front, tariffs dropped again, with firms able to offer discounts amid muted cost inflation.
The survey, sponsored by Emirates NBD and produced by Markit, contains data collected from a monthly survey of business conditions in the UAE non-oil private sector.
Khatija Haque, head of Mena research at Emirates NBD, said: "The slowdown in non-oil sector growth in the UAE over the last few months is in line with our expectations, as uncertainty about the economic outlook and low oil prices weigh on consumer and business sentiment. The strong US dollar continues to impact demand from emerging markets in particular. However, we expect the non-oil sectors to contribute positively to overall growth in the UAE this year."
Growth of new work eased to the least marked since November 2010. Though still solid, the rate of expansion was much weaker than the long-run average. Total new orders were undermined by subdued international demand. Exports barely rose amid global growth worries.
UAE non-oil private sector output showed a similar trend to new work in January, with the latest increase solid but the weakest in 27 months. Nonetheless, a number of panellists indicated that better marketing and incoming new projects had led them to raise their output further. Similarly, the rate of hiring was the slowest in almost four years at the start of 2016. Employment increased only marginally, with nearly all monitored companies noting no change since December. Meanwhile, backlogs of work were accumulated in January, having remained stable in the previous month.