A general view of Dubai, UAE
UAE: Private sector growth accelerates, supported by a rise in new business in November
Business activity in the UAE's non-oil private sector expanded at its fastest pace in 11 months during November, driven by strong market conditions that boosted new business growth, according to the S&P Global Purchasing Managers' Index (PMI) released on Friday.
The data showed that the UAE PMI rose to 54.8 in November, up from 53.8 in October, exceeding the neutral 50-point mark and indicating an improvement in the private sector. The expansion also led to faster increases in employment levels, which contributed to higher wage costs and increased overall expenditure.
Sales Prices
Non-oil private companies in the UAE raised their sales prices again in November to capitalize on strong demand and offset higher input costs, according to the PMI. Companies also expressed slightly higher optimism about the level of activity over the next twelve months, with expectations recovering slightly from the low point recorded last October.
New Orders
Data showed a rise in new business last month, with the rate of growth reaching its strongest level since January. Companies participating in the survey indicated that a supportive market environment facilitated increased customer demand and boosted activity across several sectors. Additionally, companies cited product innovation, market diversification, and technology upgrades as key drivers of sales growth.
The increase in new orders led to a significant expansion in non-oil private sector activity, as companies increased production to meet demand. The rate of activity growth was the fastest in over 18 months, with nearly two-thirds of participating companies reporting an increase since the previous month. Companies also showed greater willingness to hire last November, particularly as increased sales contributed to a sharp rise in backlog levels.
Company participating in the survey indicated that pressures on production capacity were exacerbated by delays in settling payments related to previous work. In response, overall employment levels rose last month, and although the increase was modest, it was the largest since May 2024.
Input Costs
Purchasing activity increased, marking its third consecutive monthly expansion after a brief contraction in August. However, most inputs were consumed in business operations, leading to a fourth decline in total inventories in five months.
Many companies indicated they maintained sufficient inventory to support their sales lines and expressed confidence in suppliers' ability to deliver goods promptly. Regarding prices, November data pointed to a faster rise in both input costs and output prices across the non-oil economy. The increase in costs was the largest in 14 months.
Future Outlook
Expectations regarding future activity rose slightly from their near three-year low in October. More than 13% of companies expect output to increase in the next 12 months compared to current levels, while less than 1% expect it to decrease. Many companies surveyed cited strong sales channels and a favorable business environment as key drivers of optimism.
Dubai Purchasing Managers’ Index (PMI)
In Dubai, the headline Purchasing Managers’ Index (PMI) held steady at 54.5 in November, indicating the fastest improvement in business conditions since January. Non-oil companies reported an increase in staffing levels in the middle of the fourth quarter, the fastest rise in 18 months, while input inventories fell for the first time since August.
Supply chains also improved last month, with delivery times shortening at the fastest rate in a year and overall input costs rising at the fastest pace since February, driven by pressure from staffing costs.
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