In September, the non-oil private sector of the UAE experienced robust demand, with new orders increasing at their fastest pace in four years, according to an economic analysis. The latest report from the S&P Purchasing Managers’ Index (PMI) indicated that the country’s PMI surged to 56.7 in September, up from 55 in August. This growth was attributed to a strong economy and competitive pricing.
The report highlighted that lower prices and improved economic conditions contributed to the highest level of the new orders sub-index since June 2019. While overall selling prices decreased in September, rising input costs put pressure on some companies, leading them to raise their charges to offset increased expenses.
David Owen, a senior economist at S&P Global Market Intelligence, noted that increased demand in September led to greater purchasing activity in non-oil firms, which in turn accelerated purchase price inflation. The report also indicated that confidence in the UAE market reached its highest levels since March 2020, thanks in part to business-friendly regulations, a stable political environment, and infrastructure development. Other positive factors included tax benefits, economic diversification, and the quality of life for expatriates and skilled labor.
The report further revealed that both domestic and external market demands grew, with foreign clients’ needs rising at the sharpest rate in over four years. Sub-components of the PMI, such as input and employment inventories, saw slight increases in September. Firms were found to have leveraged previous hires and inventory growth, suggesting they had sufficient capacity to handle the influx of new orders.
Delivery times shortened significantly in September, marking the sharpest reduction in over four years, as non-oil businesses continued to witness improvements in their supply chains. The report predicted that the UAE’s economy would expand by 3 percent this year and by 4 percent in 2024, primarily driven by the growth of its non-oil sector. The credit rating agency emphasized the growth in sectors like tourism, government agencies, and technological advancements, as well as the country’s strategic policy implementation for long-term economic expansion.
Last month, Fitch Ratings echoed similar economic trends, noting the UAE’s strong economic conditions, reflected in improved banking sector profitability. A healthy banking sector attracts foreign investments and contributes to higher economic activity and a positive PMI outlook.
Source: Arab News