The UAE’s non-oil private economy continues to grow steadily in November: Purchasing Managers Index

The UAE’s non-oil private sector grows for the 12th consecutive month NovemberA survey on Tuesday showed it was slightly higher than last month, when it expanded at its fastest pace in more than two years.

Seasonally adjusted IHS Markit UAE Purchasing Manager Index (SMEs), from 55.7 in October to 55.9 in November, which is the highest level since June 2019-driven by Dubai’s hosting of the World Expo.

The continuous improvement in business conditions has changed significantly compared to last year, when the UAE’s Purchasing Managers Index recorded only four months of expansion, as the pandemic has hit the tourism, aviation and other key economic sectors hard.

IHS stated in the PMI report: “The significant expansion of mid-quarter output and new business volume in the fourth quarter supports this recovery.”

“The indexes of these two measures have both risen to their highest levels since mid-2019, because as the country reopens its tourism industry and benefits from the 2020 World Expo, companies emphasize strong growth in demand. Export sales have also increased, despite the increase. The speed is much lower than that of a brand new business.”

The output sub-index rose from 61.1 in October to 61.6 in November. New orders have also accelerated the growth rate.

Despite this, the employment sub-indices are mostly flat, and confidence in future output has fallen.

“Although it was higher than most of the pandemic, business confidence is still sluggish compared to the historical average in November, as companies say that fierce competition has cast a shadow over their sales forecasts. It then fell for the fourth consecutive month. In spite of increasing pressure on production capacity, the level of staff has hardly changed,” said David Irving, an economist who surveys compiler IHS Markit.

“The stagnation of recruitment activities shows that companies are delaying employees’ decisions until they know the full extent of the economic recovery after the Expo. That is, further increases in demand and backlog may support the increase in employment.”