S&P Global Market Intelligence said the UAE's non-oil Purchasing Managers' Index fell to 50.8 in June from 52.6 in May.

The survey recorded the weakest operating improvement since February 2021 while keeping the economy just above its 50 growth threshold.

S&P Global Market Intelligence said employment contracted for the first time in more than four years.

The labour reading makes the survey a Gulf economy signal for companies managing demand, staffing and logistics after the Strait of Hormuz disruption.

S&P Global Put The UAE PMI At 50.8

S&P Global Market Intelligence said the seasonally adjusted UAE PMI showed only marginal expansion in June.

S&P Global Market Intelligence said readings above 50 indicate growth and readings below 50 indicate contraction.

The National article said resilient domestic spending and public investment supported businesses at the end of the second quarter.

It also cited geopolitical disruption, cautious client activity and competitive pressure as headwinds for the broader economy.

S&P Global Market Intelligence said the labour-market contraction was among the sharpest since August 2020, during the Covid-19 pandemic.

The research firm linked the reversal in hiring to demand weakness, rising costs and productivity drives.

David Owen Cited Soft Demand And Cost Pressure

David Owen, principal economist at S&P Global Market Intelligence, said the drop in employment showed the effect of soft client demand and rising cost burdens.

He said new business growth remained mild because clients were delaying spending and tourism activity remained sparse.

Owen also said recent easing of regional tensions should help companies recover demand and normalise supply chains.

He pointed to greater shipping movement through the Strait of Hormuz in June as a reason delivery times shortened.

The survey still warned that the rebound may be gradual.

Owen said client caution had persisted and businesses had moved to cut staff capacity.

Strait Reopening Shortened Delivery Times

The June survey followed disruption from the US-Iran conflict and the closure of the Strait of Hormuz.

Hospitality, aviation and tourism were among the Gulf sectors hit hardest by the conflict.

The source said a US-Iran ceasefire in June reopened the strait to shipping and relieved some pressure on Gulf economies.

S&P Global survey respondents also pointed to construction projects, digital-services expansion and sales pipelines as pockets of strength.

Those pockets were not enough to remove broader weakness.

New business growth rose to a three-month high but stayed below its historical average, while survey panellists cited delayed customer spending, tourism weakness and elevated price pressure.

Dubai PMI Fell To 50.7

Dubai's non-oil private sector also expanded only slightly in June.

The Dubai PMI fell to 50.7 from 52.0 in May, which the article described as the weakest improvement in the emirate's non-oil private-sector health since January 2021.

The article said job losses in Dubai were the quickest recorded in five and a half years.

It also said businesses raised output, with the pace of output expansion increasing to the fastest rate since March.

The survey did not identify company-level layoffs, revenue losses, sector-by-sector job totals, named delayed projects or the value of supply-chain disruption tied to the June PMI decline.