A measure of Dubai’s non-oil private business growth slowed last month as new hires grew at the weakest pace in three and a half years.
It comes amid cooling economic growth in the aftermath of the biggest drop in oil prices since the financial crash.
The UAE purchasing managers’ index (PMI) fell to 56 last month from 57.6 in August, said Emirates NBD.
The Dubai bank sponsors the monthly survey of business conditions in the UAE’s non-oil private sector by Markit, a financial information services company.
“The slight slowdown in the pace of expansion in Dubai’s non-oil economy is consistent with the slowdown across the UAE in September,” said Tim Fox, Emirates NBD’s chief economist. Overall, the pace of activity remains robust, particularly in the construction sector.
“The travel and tourism sector remains the softest out of the three sectors surveyed, although optimism remains high, and we expect activity to recover as we head into the fourth quarter of 2015,” Mr Fox added.
The bank did not give a breakdown of the PMI findings, but readings above 50 indicate growth while readings below that level indicate contraction.
Emirates NBD said last week that the seasonally adjusted UAE PMI, which covers the national non-oil economy, fell to 56 last month from the six-month high of 57.1 in August. The index for last month nonetheless indicated increases in output and new orders.
The UAE economy is estimated to have grown more than 4 per cent last year even though oil prices fell more than 50 per cent in the second half.
The federal government relies on oil revenues to fund more than 60 per cent of its budget.
As a result of the oil slump, many economists – including those at HSBC, Standard Chartered and the IMF – have lowered their growth forecasts for Arabian Gulf countries this year.
The UAE is forecasting growth to top 3.5 per cent this year, according to Sultan Al Mansouri, the Minister of Economy.
But the IMF is projecting growth of 3 per cent this year, down from 4.6 per cent last year, as the oil slump results in weaker real estate and corporate activities.
mkassem@thenational.ae
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