DUBAI, (Reuters) – Growth in the United Arab Emirates’ non-oil private sector fell in December to its slowest rate since October 2016, a survey showed on Thursday.
The seasonally adjusted Emirates NBD UAE Purchasing Managers’ Index, which covers manufacturing and services, dipped to 54.0 in December from 55.8 in November.
The drop weighed on the 2018 average, which went down to 55.5 from 56.1 in 2017.
The index remained above the 50 line denoting growth but “the subcomponents of the survey suggest that this is continuing to come at a cost to businesses’ margins,” said Daniel Richards, MENA Economist at Emirates NBD.
The output subindex fell to 58.8 from 60.1 and for new orders dropped to 58.3 from 61.0.
Selling prices in the UAE fell again in December, although as quickly as they did in November – when they dropped at the fastest rate since the 2009 recession, but they remained below 50.
Richards said the fall in prices was partly offset by a slower pace of growth in purchase costs, but “the squeeze on margins is apparently still taking its toll on head count and pay; both employment and staff costs were broadly flat compared to a month earlier.”
Only 1.4 percent of firms reported hiring new staff in December.
– Detailed PMI data are only available under licence from IHS Markit and customers need to apply for a licence.