Sign in
Non-oil business activity slightly expanded again in November on the back of robust demand conditions and competitive pricing, according to S&P Global’s UAE Purchasing Managers’ Index (pdf). The UAE’s PMI rose marginally to 54.2 from 54.1 in October, yet still remaining above the 50.0 threshold separating growth from contraction.
Business output and activity levels rose due to the sharpest increase in new order volumes since August. This rise in demand occurred due to businesses acquiring new customers through marketing initiatives and price reductions.
Though employment is still on a growth trajectory, elevated capacity pressures caused its growth to “slip to a 31-month low” and input purchases to increase at the “slowest pace since July 2023,” according to S&P Senior Economist David Owen.
Costs are climbing at a slightly faster pace than the long-run trend, which was mainly attributed to increases in material, technology, fuel, machinery, and maintenance prices. On the other hand, firms chose to offer price discounts to remain competitive which led them to marginally lower their fees.
Backlogs are still piling up despite logistical improvements: Several businesses didn’t accurately anticipate their future activity growth, so the increase in orders caused delays in the completion schedule, causing a rise in backlogs. However, supplier delivery times improved, leading to a minor increase in overall inventories, with new purchases being consumed by present output requirements.
Business sentiment leans toward uncertainty as confidence levels in future activity reached its “second lowest” since early 2023, Owen said. Meanwhile, experts are arguing that markets are becoming increasingly crowded, subduing pricing power.
MEANWHILE, IN DUBAI-
Dubai’s PMI rose on a sharper incline: The emirate’s PMI increased to 53.9 in November, up from 53.2 in October due to the fastest increase in new order inflows since August and the highest across the country. Business activity boomed as lower prices drove a rise in sales levels.
Output expectations declined to a 23-month low leading to a drop in employment levels for the first time since April 2022. This development led to a reduction in margins due to rising purchase prices. Meanwhile, inventories were reduced for the first time since July.
ELSEWHERE IN THE REGION-
- Saudi Arabia’s business activity expanded at its greatest pace since July 2023 to 59.0 (pdf), up from 56.9 in October, on the back of upturns in new orders, purchasing activity, and staff recruitment;
- Egypt’s non-oil private sector activity slightly improved to 49.2 (pdf) in November from 49.0 in October, despite a decline in output levels due to weaker order inflows.
