The UAE Purchasing Managers’ Index, issued by Standard & Poor’s Global, monitored a strong expansion in the non-oil private sector in the UAE, with a rise in new business flows that led to a noticeable increase in commercial activity during January 2024.
Strong demand, increased customer numbers and promotional activity helped improve business conditions.
The UAE’s main seasonally adjusted PMI – a composite index designed to give an accurate overview of operating conditions in the non-oil private sector economy – remained well above the neutral level (50 points) that separates growth from contraction, as it recorded last January 56.6 points. , compared to 57.4 points in December 2023.
The PMI trend points to a sharp, but slower, expansion in non-oil production in January. Committee members reported that increased sales and marketing, new and existing projects, increased investment and government initiatives were reasons for growth.
New business
A similar increase in new business was seen in January, with around a quarter of companies participating in the study reporting an increase compared to December.
Companies continued to highlight that strong demand conditions helped attract new customers and increase sales. As was the case in December, the positive development was mostly due to domestic factors, with companies reporting that the increase in new foreign orders was slight.
Non-oil-producing companies in the UAE recorded a slight increase in their employment levels during the month of January. Input purchases continued to grow sharply, as companies looked to increase their inventories and anticipated an increase in customer demand.
The average prices of products and services of non-oil producing companies decreased for the third month in a row, and to the greatest extent since May 2023. The majority of participating companies attributed this decrease to increased competition and efforts to attract new customers. Finally, the level of confidence regarding expectations for activity in 2024 was positive. It is approximately equal to the 2023 average, although it has declined slightly compared to December.
Sustainable expansion
Companies generally expected that strong demand and sales would lead to a sustainable expansion in production, and aspirations for new projects and increased investment would also help boost optimism.
David Owen, chief research economist at Standard & Poor’s Global Market Intelligence, said: “While the non-oil economy in the UAE picked up where it left off at the end of 2023, the decline in the Purchasing Managers’ Index to 56.6 points in January indicated a decline.” Slight growth after the sector achieved its best quarterly performance in four and a half years. “Output growth and new orders remained above the long-term average.”
2024-02-05 22:01:45
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