Dubai’s non-oil business sector grew at its fastest rate since September 2022, according to S&P Global the UAE’s Purchasing Managers’ Index hit 55.5 in March as compared to 54.1, in February.
This was reflected in increases in both jobs and inventories, with growth rates reaching multi-year records.
Any rate over 50 is an indication of expansion.
However, the report notes that new orders rose sharply, but growth weakened
to a 14-month low.
The improvement in the non-oil sector was attributed to the growth in employment, output and purchase stocks, according to the latest report.
“The Dubai PMI picked up for the first time in three months in March, rising to 55.5 from a 12-month low of 54.1 in February, as companies reported greater efforts to build supply-side strength in light of a further rapid expansion in activity levels,” said David Owen, economist at survey compiler S&P Global Market Intelligence.
Owen noted that there was a ‘slippage’ in the wholesale and retail and travel and tourism sectors as the sector lost momentum from their post-COVID peaks in 2022, the report reveals.
‘However, a further slowdown in new business growth shows that demand growth is continuing to weaken from its post-COVID peak, with notable slippage seen in the wholesale & retail and travel & tourism sectors. This suggests that rapid activity growth may not be sustained, which was reflecting in a slight drop in future output expectations,” Owen added.
Purchase rate increased to the highest number in three years helping boost inventories and supporting higher new orders and stronger output expectations for the coming year.
In March, job creation picked up to its fastest since January 2018. Construction companies experienced a notable increase in output expansion, the largest since September, and witnessed a significant rise in new orders, leading to an acceleration in inventory and employment growth.
To fulfil the requirements of new and ongoing projects, firms purchased higher volumes of raw materials, resulting in their input stocks growing at the fastest pace since May 2018.
Despite vendors’ efforts to meet tighter customer requirements, the rate of improvement in supplier delivery times was only marginal, slipping from February’s three-and-a-half-year record.
The latest survey data revealed that construction input prices rose further in March, including fuel, cement, iron, and a slight uptick in staff wages. To maintain robust sales volumes, companies offered price discounts to customers, and the degree of positive sentiment towards future activity was relatively mild in March, with only 10 percent of survey participants projecting output growth over the next 12 months.
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