The Purchasing Managers' Index (PMI) in Dubai fell in May after three consecutive months of increases, affected by a slowdown in the expansion of production in the non-oil private sector at its weakest pace in six months, along with a slowdown in new order growth.
Results from the PMI by IHS Markit showed that non-oil economic production in Dubai increased for the sixth consecutive month in May; however, the growth rate slowed to the lowest pace during this period. Nevertheless, companies surveyed indicated that ongoing project work helped offset the slowdown in new order growth.
The PMI dropped from 53.5 points in April to 51.6 points in May, yet it still indicates the second-fastest improvement in operating conditions over the past 10 months.
Key findings from the PMI study include:
- The construction sector was the only one to see a faster increase in production in May, while wholesale and retail sectors experienced slower expansion.
- Activity in the travel and tourism sector declined again, being the weakest among the sectors, and new business in this sector fell for the fourth time in five months.
- Weak growth in production and new orders led companies to reduce staffing levels for the second time in three months.
- Vendor performance deteriorated for the fourth consecutive month in May.
David Owen, an economist at IHS Markit, stated that the drop in the PMI in May followed three months of continuous rises, indicating a more modest improvement in non-oil business conditions. Both production and new orders rose at weaker rates, despite April’s data being the strongest since late 2019. He added: "The slowdown has led companies to reduce workforce numbers in May, but the overall rate of job losses was marginal."
