Strong demand: UAE’s non-oil business growth picks up in September

The UAE’s non-oil private sector had robust demand in September, with new orders growing at their quickest rate in four years, according to an economy tracker.

The UAE’s PMI achieved 56.7 in September, up from 55 in August, thanks to a strong economy and competitive pricing, according to the most recent S&P Purchasing Managers’ Index survey.

Lower pricing and improved economic circumstances, according to the study, lifted the new orders sub-index to its highest level since June 2019.

While total selling prices declined in September, growing input charges constrained pricing pressures for certain businesses, according to the research, as they were compelled to boost their charges due to rising expenses.

“In the meantime, increased purchasing at non-oil businesses in September served to speed the pace of purchase price inflation,” said David Owen, senior economist at S&P Global Market Intelligence.

According to the research, market confidence in the UAE has reached its highest level since March 2020. Some of the elements contributing to this are the country’s business-friendly policies, stable political climate, and infrastructural development.

Other good effects were tax breaks, economic diversification, and improved quality of life for expatriates and skilled personnel. 

The report also stated that demand from both local and external markets increased, with demand from overseas clients increasing at the fastest rate in over four years.

Other PMI sub-components, including input and employment inventories, climbed modestly in September. Furthermore, enterprises leveraged past employment and inventory expansion, showing that they had sufficient capacity to deal with the additional order flow.

This month’s delivery times were also the shortest in nearly four years, as non-oil firms saw additional improvements in supply chains.

The UAE economy is expected to increase by 4% in 2024 and 3% this year, thanks to solid expansion in the country’s non-oil sector, according to the analysis.