MENA PMIs May 2024

• The S&P Global PMI survey for the UAE was at 55.3 for the second month running in May, with the second quarter looking somewhat weaker than Q1, albeit still comfortably in 50.0-plus expansionary territory and higher than the series average. It should be noted that weather-related disruptions have impacted the survey responses over the past two months, meaning that there could be a pick-up hereafter as these pass through.

• Dubai’s PMI slipped to 54.7 in May, from 55.1 in April and compared with an average of 57.7 over the first quarter. May’s survey marked the weakest reading for the Dubai index since February 2023, but the greater impact of the rains on Dubai as compared with Abu Dhabi and some other parts of the UAE likely explains this more pronounced slowdown.

• Saudi Arabia’s Riyad Bank PMI survey slowed to 56.4 in May, down from 57.0 the preceding two months. While still comfortably above the neutral 50.0 line, this marked the slowest expansion for the non-oil private sector since the surprise downturn in January and it was the second-lowest reading in 22 months. The index has averaged moderately slower over the first five months of this year as compared to the same period in 2023, in line with our projection that non-oil GDP growth will slow to 4.0% this year, from 4.4% in 2023. Q1 private non-oil growth was 2.8% y/y, compared with 5.3% in Q1 2023.

• Egypt’s S&P Global PMI survey saw a substantial improvement in May as it rose to 49.6, from 47.4 in April. While this is still below the neutral 50.0 line – thereby marking the 42nd consecutive contractionary reading for the Egyptian private sector – it is the shallowest contraction since August 2021 and there is considerable evidence in the index subcomponents that Egypt’s economy is starting to turn a corner. Egypt has been under substantial financial and economic pressure over the past several years, but a flurry of renewed international support began in February with a pledge by the UAE to invest USD 35bn and now totals USD 57bn with additional pledges from the IMF, World Bank, and EU. This was met by renewed reform efforts from the Egyptian government, not least a devaluation to the EGP and a commitment to a durably flexible exchange rate regime.

Click here to download full May PMI analysis