Business activity in the UAE continued to expand in September, although the pace of output growth in its non-oil private sector was the slowest in three years.
The S&P Global PMI Index for the UAE dipped to 53.8 in September from 54.2 in August. Although well above the 50 neutral mark, the index was at its second lowest in three years, beating only July's reading of 53.7.
While businesses surveyed indicated a rise in output last month on the back of stronger demand, the pace of growth slowed down to the lowest level since September 2021, S&P Global Market Intelligence said in a report on Thursday.
New business received by non-oil companies in the Emirates rose at a sharp pace in September, helped by an increase in export sales. However, the rate of expansion decelerated and was the second-weakest in a year and a half.
“Businesses faced further challenges with the completion of new work, despite a slowing of sales growth and a strong uplift in purchases,” David Owen, senior economist at S&P Global Market Intelligence, said.
“Competition remained another area of difficulty, with panellists [surveyed] reporting that tougher market conditions had led to a more cautious outlook for the upcoming year – output expectations are now at their lowest since early 2023.”
A recent trend of selling price increases persisted in September, as businesses raised charges at the fastest pace since January 2018. The uplift followed another sharp increase in rates, with shipping, petrol, technology and maintenance costs often reported as sources of inflationary pressures, according to the survey findings.
Despite the slowing pace of growth in the UAE’s non-oil private sector, the overall economy is set to maintain robust growth momentum this year.
The country's economy, which grew by 3.4 per cent in the first quarter of 2024, is expected to expand by 4 per cent this year on the back of a boost from its non-oil sector, according to the latest data from the Central Bank of the UAE.
The non-oil sector is projected to remain strong at 5.2 per cent in 2024 and 5.3 per cent in 2025, driven mainly by efforts to boost foreign investments and continuing structural reforms such as 100 per cent ownership of foreign businesses and tax reforms, the banking regulator said.
The Emirates also reported a record Dh1.4 trillion ($381.5 billion) in non-oil foreign trade in the first six months of this year, which underpins the recent flurry of economic and trade deals it has signed with partners across continents.
Saudi Arabia
Non-oil private sector business conditions in Saudi Arabia saw its best improvement in four months at the end of the third quarter.
The seasonally adjusted Riyad Bank purchasing managers’ index – a crucial gauge of the kingdom’s non-oil economy – climbed to 56.3 in September, up from 54.8 in August. The benchmark is well above the neutral 50 mark that separates non-oil economic growth from contraction.
Saudi Arabia’s PMI rose for the second consecutive month in September, hitting the highest reading since May. The latest reading underpins a “notable acceleration in non-oil private sector growth”, Naif Al Ghaith, chief economist at Riyad Bank, said. “Businesses are responding to stronger domestic demand, which plays a critical role in reducing Saudi Arabia’s dependence on oil revenues.”
The upward trend in activity “signals rising business confidence, which reflects a healthy environment for investments, job creation, and overall economic stability”, he added.
The 1.5-point rise in the PMI Index was supported by sharp expansions in output and new orders, as well as a tightening of supply conditions in the kingdom. After rising at a softest pace since early 2022 in August, output levels surged in the latest survey period, driven by higher demand and approval of new projects in Saudi Arabia.
“This growth in the non-oil sector is particularly significant given the current context of oil production cuts and declining global oil prices,” Mr Al Ghaith said. “As oil revenues come under pressure, the robust performance of the non-oil private sector serves as a buffer, helping to mitigate the potential impact on the country's economic health.”
Saudi Arabia, the world’s leading oil exporter, is pushing to diversify its economy away from oil under its Vision 2030 programme. Among the central planks of the overarching economic reform agenda are supporting the development of sectors including technology, property, tourism and infrastructure, boosting employment, expanding the non-oil industrial base as well as expanding the kingdom’s financial markets and increasing foreign direct investment.
The kingdom expects its overall economy to expand by 0.8 per cent this year, supported by a 3.7 per cent growth its non-oil sector, the finance ministry said this week. The economy is projected to grow by 4.6 per cent in 2025, 3.5 per cent in 2026 and 4.7 per cent in 2027.
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A list of the animal rescue organisations in the UAE
UAE currency: the story behind the money in your pockets
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- v South Africa, June 15
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- v Pakistan, June 29
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more from Janine di Giovanni
Conflict, drought, famine
Estimates of the number of deaths caused by the famine range from 400,000 to 1 million, according to a document prepared for the UK House of Lords in 2024.
It has been claimed that the policies of the Ethiopian government, which took control after deposing Emperor Haile Selassie in a military-led revolution in 1974, contributed to the scale of the famine.
Dr Miriam Bradley, senior lecturer in humanitarian studies at the University of Manchester, has argued that, by the early 1980s, “several government policies combined to cause, rather than prevent, a famine which lasted from 1983 to 1985. Mengistu’s government imposed Stalinist-model agricultural policies involving forced collectivisation and villagisation [relocation of communities into planned villages].
The West became aware of the catastrophe through a series of BBC News reports by journalist Michael Buerk in October 1984 describing a “biblical famine” and containing graphic images of thousands of people, including children, facing starvation.
Band Aid
Bob Geldof, singer with the Irish rock group The Boomtown Rats, formed Band Aid in response to the horrific images shown in the news broadcasts.
With Midge Ure of the band Ultravox, he wrote the hit charity single Do They Know it’s Christmas in December 1984, featuring a string of high-profile musicians.
Following the single’s success, the idea to stage a rock concert evolved.
Live Aid was a series of simultaneous concerts that took place at Wembley Stadium in London, John F Kennedy Stadium in Philadelphia, the US, and at various other venues across the world.
The combined event was broadcast to an estimated worldwide audience of 1.5 billion.
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Company Profile:
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Founders: Rashi Chowdhary and Saad Umerani
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UAE currency: the story behind the money in your pockets
Killing of Qassem Suleimani
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Moon Music
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Tearful appearance
Chancellor Rachel Reeves set markets on edge as she appeared visibly distraught in parliament on Wednesday.
Legislative setbacks for the government have blown a new hole in the budgetary calculations at a time when the deficit is stubbornly large and the economy is struggling to grow.
She appeared with Keir Starmer on Thursday and the pair embraced, but he had failed to give her his backing as she cried a day earlier.
A spokesman said her upset demeanour was due to a personal matter.
Mohammed bin Zayed Majlis
Killing of Qassem Suleimani
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Five famous companies founded by teens
There are numerous success stories of teen businesses that were created in college dorm rooms and other modest circumstances. Below are some of the most recognisable names in the industry:
- Facebook: Mark Zuckerberg and his friends started Facebook when he was a 19-year-old Harvard undergraduate.
- Dell: When Michael Dell was an undergraduate student at Texas University in 1984, he started upgrading computers for profit. He starting working full-time on his business when he was 19. Eventually, his company became the Dell Computer Corporation and then Dell Inc.
- Subway: Fred DeLuca opened the first Subway restaurant when he was 17. In 1965, Mr DeLuca needed extra money for college, so he decided to open his own business. Peter Buck, a family friend, lent him $1,000 and together, they opened Pete’s Super Submarines. A few years later, the company was rebranded and called Subway.
- Mashable: In 2005, Pete Cashmore created Mashable in Scotland when he was a teenager. The site was then a technology blog. Over the next few decades, Mr Cashmore has turned Mashable into a global media company.
- Oculus VR: Palmer Luckey founded Oculus VR in June 2012, when he was 19. In August that year, Oculus launched its Kickstarter campaign and raised more than $1 million in three days. Facebook bought Oculus for $2 billion two years later.
