Sign in
Growth in Dubai’s non-oil sector activity surged to its highest level in February since May 2019, after hitting a five-month low in January, according to S&P Global’s purchasing manager’s index (pdf). The PMI reading rose to 58.5 in February, up from January’s 56.6, signaling an improvement in the operational environment within the emirate’s non-oil economy. With the index firmly above the 50.0 mark that indicates expansion, Dubai’s non-oil sector is poised for continued growth and development in the months ahead, according to the report.
REMEMBER- It was a good month for the whole country: The UAE’s non-oil economy continued to see “strong upward momentum” as output levels rose at their sharpest rate since mid-2019. The country’s PMI recorded 57.1 in February, up from 56.6 in January, S&P’s PMI (pdf) showed.
Healthy business activity marked by increased output: Dubai businesses saw an uptick in activity during the month, with 36% of survey respondents reporting increased output — the fastest surge in 18 months. Elevated demand, strong market conditions, and expanded project portfolios were key contributors to this growth. “The reading signals that the Dubai non-oil sector is one of the fastest growing worldwide according to global PMI data,” Senior Economist at S&P Global Intelligence David Owen said.
Surging customer demand kept order books strong,with businesses noting the impact of price cuts and promotions. Output charges dropped significantly, hitting an eight-month low, especially in the wholesale & retail sector.
Hiring reached its highest pace since August 2015, as increased workloads prompted companies to expand their workforce. Furthermore, inventory inputs and partially finished items hit a three-month peak, possibly showcasing companies’ anticipation for higher demand in the non-oil sector.
Red Sea disruptions only slightly impacted supplier performance in 1Q 2024, leading to a minor reduction in lead times for non-oil companies. Although a slight improvement from January, lead times remained the second-slowest in over a year. Input costs also rose to a three-month high but remained “modest overall.”
Businesses are more confident than they were in January, signaling heightened optimism for growth in the non-oil sector over the next 12 months. “Inflationary pressures remained soft which encouraged greater sales promotions, while employment and inventory growth strengthened. All this suggests that the non-oil sector’s expansion has further to run during 2024,” according to Owen.
