UAE's Non-Oil Sector Grows at Fastest Pace in 11 Months

UAE Economy

                                                                              

 UAE's Non-Oil Sector Grows at Fastest Pace in 11 Months

A survey published on Friday showed that non-oil private sector output in the UAE accelerated in November at its fastest pace in 11 months, supported by strong market conditions and an increase in new business.

The seasonally adjusted S&P Global UAE Purchasing Managers' Index (PMI) rose to 54.8 in November from 53.8 in October, reaching a nine-month high and remaining in growth territory.

The expansion also led to a faster increase in employment levels, which contributed to higher wage costs and increased overall expenses.

Companies raised their selling prices again in November to capitalize on strong demand and offset higher input costs. Companies also expressed slightly higher optimism about the level of activity over the next 12 months, with expectations recovering slightly from the low point recorded in October.

David Owen, senior economist at S&P Global Markets, stated: “The UAE’s non-oil private sector has performed strongly in the fourth quarter so far, with the November Purchasing Managers’ Index (PMI) indicating the strongest improvement in business conditions in nine months. 

This rebound has often been linked to robust customer demand and healthy sales lines, which have encouraged companies to expand production and hiring. While employment growth has remained moderate overall, it was still the fastest in a year and a half, suggesting a partial recovery in labor markets after a period of relative calm.”

He added: “However, the sharp rise in employment has been accompanied by a larger increase in wage costs, as companies have indicated the need to raise salaries in response to cost-of-living pressures and skills shortages. This has led to a further increase in overall business expenses, which could contribute to broader inflationary pressures in the coming months.”