DUBAI (Reuters) - Growth in the United Arab Emirates' non-oil business sector eased a little in March, a survey showed on Wednesday, with supply constraints from shipping disruption in the Red Sea contributing to backlogs.
The seasonally-adjusted S&P Global UAE Purchasing Managers' Index slowed to 56.9 in March from 57.1 in February but remained firmly above the 50 mark, signalling growth.
The output sub-index eased to 62.7 last month from February's near five-year high, but growth momentum remained strong, lifted by new business and projects in the pipeline.
The backlogs of work sub-index rose to its joint highest level of 59.8 - previously recorded in June 2018 - from 56.4 in February. Contributing factors included strong demand, administrative delays, and Red Sea disruption to shipments, the survey said.
"The overall picture for the UAE non-oil private sector remained rosy at the end of the first quarter," said David Owen, senior economist at S&P Global Market Intelligence.
"While the surge in backlogs is concerning as an indicator of business health, the pent-up demand should support activity growth for even longer once these issues are resolved."
The new orders sub-index rose to 61.5 in March, from 60.4 in February, signalling continued strong demand.
Optimism about the outlook among non-oil businesses increased in March to its best level in six months, the survey showed.