{"id":92779,"date":"2024-06-06T00:00:00","date_gmt":"2024-06-06T00:00:00","guid":{"rendered":"https:\/\/enterpriseam.com\/uae\/pmi-growth-softens-in-may-amid-post-flood-disruptions\/"},"modified":"2024-06-06T00:00:00","modified_gmt":"2024-06-06T00:00:00","slug":"pmi-growth-softens-in-may-amid-post-flood-disruptions","status":"publish","type":"post","link":"https:\/\/enterpriseam.com\/uae\/2024\/06\/06\/pmi-growth-softens-in-may-amid-post-flood-disruptions\/","title":{"rendered":"PMI growth softens in May amid post-flood disruptions"},"content":{"rendered":"

Non-oil business activity softened to a 16-month low in May<\/strong>, as businesses continued to face the knock-on effects of April\u2019s record flooding, according to S&P Global\u2019s UAE Purchasing Managers\u2019 Index (pdf)<\/a>. The index remained flat<\/a> at 55.3 in May, still well above the 50.0 threshold that separates growth from contraction.<\/p>\n

April\u2019s storms weighed on business activity<\/strong>, with businesses reporting continued disruptions and backlogs of work staying on a steep upward trajectory \u2014 rising at the fastest pace since the survey began in 2009. Disruptions and attacks in the Red Sea and administrative challenges also weighed on activity, the report notes. Despite this, vendors were able to trim their delivery times more quickly than April.<\/p>\n

Price pressures were high\u2026:<\/strong> Purchasing expenses grew to their highest since last November, as firms raced to meet output requirements against the backdrop of robust sales pipelines. Some firms also reported having to restock items that were damaged during the floods, which led to higher input spending, while rising fuel prices and higher wages \u2014 which grew at the fastest pace in six years \u2014 also intensified price pressures. <\/p>\n

\u2026and consumers got the brunt of it: <\/strong>Average prices increased for the first time in seven months as firms passed input costs onto clients, S&P Global said. The uptick was marginal, but was still the fastest in over three years. <\/p>\n

P<\/strong>ost-flood recovery will take some time:<\/strong> \u201cFirms have a lot of work to do to get on top of their workloads, including rebuilding output levels, hiring workers and boosting inventories,\u201d S&P Global Market Intelligence Senior Economist David Owen said. <\/p>\n

Demand perked up in May after companies faced a slowdown in April, <\/strong>with several firms citing improvements in client spending and tourism, according to the report. Some firms reported slowly recovering sales volumes, with new orders rising at the second-weakest pace since August 2023, while other firms reported operations were still on hold.<\/p>\n

AND- Staffing levels picked up to a three-month high<\/strong> as businesses took on additional labor in May.<\/p>\n

The outlook is still positive: <\/strong>\u201cThe focus for the next few months looks to be the recovery of the sector from this crisis. Nonetheless, with demand still strong, firms should be in a good position to resume their robust growth once capacity has been restored,\u201d he added.<\/p>\n

Business confidence towards future output also strengthened due to hopes of more<\/strong> stable economic conditions<\/strong>, higher sales, greater earnings, and heightened marketing activity.<\/p>\n

DUBAI- <\/p>\n

Dubai\u2019s <\/strong>PMI still<\/strong> in decline: <\/strong>Dubai\u2019s business activity slumped to a 15-month low, falling to 54.7, down from 55.1 in April \u2014 remaining in expansion territory. The index signaled a \u201cstrong improvement in business conditions,\u201d as new orders inched up after recording a 13-month low in April, with some firms reporting higher client activity after the April disruptions. <\/p>\n

Inflationary pressures accelerated in May <\/strong>on the back of an increase in raw materials and petrol prices. Overall input costs surged to a 22-month high, leading to the first increase in output prices during the period. <\/p>\n

ELSEWHERE IN THE REGION- <\/p>\n