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UAE Economy Reels: Iran Conflict Slows Non-Oil Growth
6 May
Summary
- UAE's non-oil private sector growth slowed significantly in April.
- New orders and foreign sales saw their sharpest decline in years.
- Input cost inflation reached its highest point since July 2024.
The UAE's non-oil private sector demonstrated its slowest expansion in April since February 2021, primarily due to the repercussions of the Iran conflict on shipping and tourism. This slowdown was reflected in diminished sales and exports, with new orders experiencing their slowest growth in over five years. Foreign sales saw a significant drop, the most substantial since the survey began in August 2009, excluding the pandemic period.
Despite a softer pace, output continued to increase, supported by existing projects. Purchasing growth remained moderate as higher costs and supply constraints affected demand. Price pressures intensified, with input cost inflation reaching its highest level since July 2024 and selling prices escalating. Nevertheless, firms expressed increased optimism for the year ahead, with Dubai's headline PMI also falling to a 55-month low, although confidence in demand recovery persisted.
