UAE Non-Oil Sector Sees Increased Growth in December

UAE Non-Oil Private Sector Records Strongest Growth in Nine Months

December was a big month for the UAE’s non-oil private sector, with demand and business activity hitting their highest points in nine months. The most recent S&P Global UAE Purchasing Managers’ Index (PMI) showed consistent expansion, rising from 54.2 in November to 55.4 in December. The sector has grown for the third consecutive month, with a PMI value above 50 indicating expansion.

The new orders subindex increased to 59.3 from 58.0 in November, indicating a significant gain in new business, according to the poll. This indicates that there is still a strong need for goods and services. However, the export subindex dropped to its lowest level in seven months, suggesting a decline in export demand.

Work backlogs continued to be substantial, suggesting that companies were finding it difficult to meet the growing demand. S&P Global Market Intelligence senior economist David Owen observed that businesses were dealing with large backlogs and that capacity levels were being strained. Owen underlined that companies must improve their resources in order to better manage the increasing demand in the coming year, even though some companies were reluctant to hire more employees because of margin restrictions.

Looking ahead, businesses’ confidence in future activity remained cautious in December. In Dubai specifically, the PMI rose to 55.5 from 53.9 in November, indicating the strongest improvement in business conditions in the city in the past nine months.