DUBAI (Reuters) - Growth in the United Arab Emirates’ non-oil private sector slowed to a 10-year low in November and firms experienced the first monthly decline in new orders on record, a survey showed on Thursday.
The seasonally adjusted IHS Markit UAE Purchasing Managers’ Index (PMI), which covers manufacturing and services, fell to 50.3 from 51.1 in October.
Although the non-oil sector remained in growth territory — a reading above 50 indicates expansion and below, contraction — it was the UAE’s weakest growth rate since August 2009.
The survey data showed the first month-on-month decline in new business at UAE non-oil companies in the series history, though the overall reduction was marginal.
“Anecdotal evidence commonly linked the decline to subdued market conditions and weaker customer demand,” said David Owen, economist at IHS Markit and author of the report.
Employment levels fell marginally in November, after positive but weak growth last month, indicating the fastest reduction in workforce numbers in UAE non-oil businesses for nine months.
The UAE raised its expectations for economic growth in 2019 to 2.4% in September, driven by faster growth in the oil sector, after lowering them earlier this year.
“With cost pressures remaining subdued, firms continued to lower selling prices in November. The latest reduction was sharp and extended the current sequence to 14 months,” said Owen.
“As has been the case recently, respondents highlighted that strong competition forced them to offer discounts. That said, the rate at which charges fell softened for the first time since July,” he added.
Despite the slowing growth, companies were more optimistic for the year ahead, the survey showed, expecting output to rise over the coming 12 months.
Reporting by Tuqa Khalid; Editing by Catherine Evans