- May 10, 2024
- Posted by: Waqas Siddiqui
- Category: Business & Economy
UAE Non-Oil Sector – Overall Growth Despite Challenges
In April, the UAE’s non-oil private sector continued to show strong growth, as noted by S&P Global. David Owen, a senior economist at S&P Global Market Intelligence, mentioned that robust domestic economic conditions have supported the long-term business expansion plans in the region. Despite the overall positive trend, the non-oil private sector faced a sharp reduction in new business gains. This was due to severe weather conditions, including significant flooding that occurred in the UAE and the most which was recorded in its 75 years of history.
PMI Indicates Slowed Growth
The seasonally adjusted S&P Global UAE Purchasing Managers’ Index (PMI) fell to 55.3 in April from 56.9 in March, marking the lowest rate since August 2023. Although there is a slight slowdown, the UAE’s non-oil private sector growth remains above the 50.0 threshold. This drop reflects the negative impact of heavy rainfall on new orders, which grew at their slowest pace since February 2023.
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Continued Optimism and Future Prospects
Despite a decrease in new business, respondents from the UAE non-oil private sector remain optimistic about future growth. Strong market conditions and well-established sales pipelines bolster their confidence. The respondents are hopeful about a swift recovery from the recent weather disruptions. The non-oil GDP, which constitutes about 74% of the UAE GDP, continues to play a significant role in attracting foreign investment, exploring new opportunities and developing its digital infrastructure.