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Tuesday, March 5, 2024

Surge in Demand Leads to Significant Increase in New Businesses in the UAE

Surge In November, the UAE’s non-oil private sector economy maintained its robust performance, characterized by a surge in new business activities driven by strong demand conditions. The Purchasing Manager Index (PMI) reached 57.0, following October’s highest reading in over four years (57.7). Businesses proactively built input stocks to swiftly respond to escalating demand, resulting in the most rapid stockpile increase in nearly six years. While new orders continued to grow, factors such as increased demand, acquisition of new clients, project inquiries, and marketing efforts contributed to the sector’s vibrancy.

Amidst the Optimism, Lingering Concerns: Surge

Despite the positive trends, businesses expressed concerns about future activity, citing the entry of numerous firms into the market. The competition-driven stock-building efforts aimed to maintain a competitive edge in a rapidly growing economy. The International Monetary Fund’s optimistic GDP growth forecasts for 2023 and 2024, along with positive outlooks for various sectors such as real estate, construction, retail, and technology, contribute to the overall optimism. However, the report notes a clear drop in confidence levels due to concerns about competitive pressures potentially eroding market share. Staffing growth remained mild, and salaries saw only a slight uptick.

The outlook for the UAE’s non-oil private sector remains positive, with a dynamic business environment driven by increasing demand and economic growth.

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