The non-oil private sector in UAE grows for the 13th consecutive month in December
UAE’s non-oil private sector grew for the 13th consecutive month in December, the output rising to 62.1, its highest since July 2019. The IHS Markit UAE Purchasing Managers’ Index (PMI), designed to give an overview of operating conditions in the non-oil private sector, signalled a strong improvement in business conditions for the 13th straight month in private sectors owing to the benefits of EXPO 2020 and the loosening of COVID-19 measures.
The recent seasonal index showed the fastest upturn in business activity for almost two and a half years with firms trying to keep up with the demand as backlogs increased for the sixth consecutive month. Despite the pandemic affecting the global supply chain, vendors were able to meet the delivery schedules, thus shortening the supplier lead times.
Moreover, input buying fell the lowest in five months although the stock levels have risen marginally. Meanwhile, the output charges have fallen for the fifth month in a row possibly due to firms offering discounts to their customers amidst the competition. Businesses in the UAE reported a strong rise in the cost pressure, reportedly due to the elevated fuel prices and cost of raw materials. The overall cost rose the highest since March 2021, discouraging firms from purchasing extra inputs.
However, the increased mobility and strong demand caused by EXPO 2020 resulted in new orders especially by the end of December. Workforce numbers increased marginally as well, resulting in a further recovery in employment.
David Owen, an economist at survey compiler HIS market pointed out that the rise of new work volumes has supported the fastest upturn in business activity for almost two-and-a-half years. “Businesses also face the prospect of higher inflation, after the latest data indicated the fastest rise in purchase costs for nine months due to an increase in energy and raw material prices,” he said.
Nevertheless, the non-oil private sector in UAE is growing stronger than before as new orders flocks despite the pandemic caused disruptions.
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Reference
UAE non-oil private sector grows for the 13th consecutive month in December (2022, Jan 5). Khaleej Times. https://www.khaleejtimes.com/economy/uae-non-oil-private-sector-grows-for-13th-consecutive-month-in-december.
Saba, Yousef (2022, Jan 5). UAE non-oil private sector grows 13t month running. Reuters. https://www.reuters.com/world/middle-east/uae-non-oil-private-sector-activity-grows-13th-month-running-dec-pmi-2022-01-05/
UAE non-oil private economy continues solid growth in November: PMI (2021, Dec 7). The Economic Times. https://economictimes.indiatimes.com/news/international/uae/uae-non-oil-private-economy-continues-solid-growth-in-november-pmi/articleshow/88137361.cms
United Arab Emirates non-oil private sector PMI (2022). Trading Economics. https://tradingeconomics.com/united-arab-emirates/manufacturing-pmi.
