RIYADH: The growth of non-oil activities in the UAE was steady in November, driven by a sharp rise in new business inflows and efforts to rapidly replenish and build stocks in the face of healthy demand conditions, an economy tracker showed.
The latest S&P Global Purchasing Managers’ Index report revealed that the UAE’s PMI hit 57 in November, slightly down from 57.7 in October.
Despite this slight decline, the PMI of the Emirates remained well above the neutral threshold of 50, indicating a continued improvement in business conditions.
David Owen, senior economist at S&P Global Market Intelligence, said: “The strong run of demand growth in the UAE non-oil economy sparked a rapid increase in input buying during November, as firms looked to ensure they were in a good position to take advantage of growth opportunities.”
He added: “Indeed, the uplift in buying — the fastest since July 2019 — supported the most rapid build-up of stocks in close to six years, benefiting both local businesses and trade partners.”
The report revealed that operating conditions for non-oil private firms improved rapidly midway through the final quarter, supported by strong trends for new business, output and inventories.
S&P Global added that sustained growth in new business also led to an acceleration in purchasing activity in November.
The report pointed out that overall cost inflation in November remained stronger than recent trends, but selling prices were largely stable.
On the flip side, some companies that took part in the PMI survey expressed a clear drop in their confidence level about the future due to concerns about competitive pressures.
Even though the expansion in total sales was one of the fastest seen in close to four-and-a-half years, it slowed markedly from October, as some firms noted greater competitive pressures and a softer rise in new export business.
“Businesses were much less upbeat about the future path of activity, as some survey panellists reiterated concerns that a large number of firms are entering the market. The build-up of competition was likely a key factor behind stock-building efforts, with businesses wary of falling behind in a fast-growing economy,” explained Owen.