Non-oil business activity in the UAE experienced growth in October, driven by increased output. However, demand softened to its lowest level since February 2023, leading to slower job creation and a decline in selling prices, according to a business survey released on Tuesday.

The seasonally adjusted S&P Global UAE Purchasing Managers' Index (PMI) stood at 54.1 in October, indicating an improvement in the sector's overall health compared to 53.8 in September, Zawya reports.

“A softening of new business growth in October added to signs that the non-oil economy is losing strength after a robust growth period in late-2023/early-2024,” said David Owen, Senior Economist at S&P Global Market Intelligence.

“Firms in the survey panel frequently indicated that crowding in the market was eating into sales, and hitting job creation which slipped to a 30-month low,” he went on to add.

Despite recent challenges, businesses are optimistic about continued growth over the next year, bolstered by a decrease in the rate of input cost inflation. Non-oil firms reported the smallest rise in overall input costs in six months, with slower increases in both purchase prices and wages.

Companies remain generally hopeful that activity and demand will remain strong, partly due to robust sales pipelines supporting their outlook.

Although job recruitment rose in October, the growth rate fell to its lowest level in 20 months due to declining demand and reduced sales caused by increased market competition.

Non-oil companies in Dubai experienced a slower improvement in operating conditions in October, with the headline PMI decreasing to 53.2 from 54.1 in September.

In addition, Dubai's non-oil firms reported a decline in average selling prices for the first time since April, attributed to strong competition.

New business intakes increased at the slowest pace since early 2022, driven by challenging market conditions and a rise in the number of competitors.