Growth in the UAE’s non-oil private sector slowed to its weakest pace in nearly four years in May, a survey showed on Wednesday, as demand remained strong but eased from recent highs.

The seasonally adjusted S&P Global UAE Purchasing Managers’ Index (PMI) fell to 53.3 in May from 54.0 in April, marking its lowest reading since September 2021, but remained above the 50.0 threshold that indicates growth.

The rate of expansion in output was the slowest in 44 months in May, reflecting softening momentum in the non-oil sector even though demand conditions remained supportive.

The sub index for output fell to 57.3 in May from 59.4 in April, and was the lowest reading since September 2021. The pace of new order growth remained robust but the sub index dropped to 56.2 in May from April’s 56.9 reading, and was the softest in seven months.

“Although businesses continued to welcome strong demand from their clients, there were some reports that competitive pressures and weaker trade amid US tariffs had weighed on growth,” David Owen, senior economist at S&P Global Market Intelligence, said.

The survey highlighted a record decline in inventories as firms streamlined holdings amid slowing growth. The accumulation of backlogs eased to a 16-month low, indicating a softer pace of demand.

Business expectations for future output were subdued, with optimism falling to its lowest level since January.

Dubai’s non-oil private sector growth remained steady, with the headline PMI at 52.9 in May, the same as April, although demand momentum strengthened with the pace of new order growth quickening to a four-month high.