S&P Global: UAE’s non-oil sector maintains solid growth in Nov 

The UAE’s non-oil private sector saw steady growth in November as strong demand and competitive pricing boosted new business, according to the latest S&P Global UAE Purchasing Managers’ Index (PMI) data on Sunday.

The index rose slightly to 54.2 in November, up from 54.1 in October, indicating robust expansion despite a slower pace than earlier in the year.

“The UAE PMI was consistent with a solid rate of growth across the non-oil private sector in November. Businesses continued to see a marked upturn in sales, which spurred activity forwards but also greatly added to outstanding work.” David Owen, Senior Economist at S&P Global Market Intelligence, said:.

New orders increased at their fastest rate since August, driven by successful client acquisitions, marketing initiatives, and price reductions. This strong demand spurred higher business activity, with nearly a quarter of surveyed firms reporting increased output.

However, capacity pressures persisted as companies faced challenges in keeping up with growing order volumes. Employment rose only fractionally, marking its weakest growth in 31 months, while nearly all firms reported no changes to staffing levels. Backlogs of work continued to accumulate sharply due to limited capacity to fulfil rising demand.

Stock Management and Cost Pressures
Input purchasing rose at its slowest pace since mid-2023 as firms opted to meet immediate production needs rather than boost inventories. Cost pressures persisted, with inflation driven by higher prices for materials, technology, fuel, and maintenance. Despite this, businesses continued to reduce their selling prices to remain competitive, though the rate of discounting was modest.

Outlook
While the sector demonstrated resilience, business confidence in future activity remained subdued. Concerns about market saturation and competition tempered expectations, with future outlooks remaining close to September’s 18-month low.

November’s performance highlights the strength of the UAE’s non-oil economy in sustaining growth, even as businesses navigate challenges such as rising costs and capacity constraints.

Attribution: S&P Global United Arab Emirates PMI®

Subediting: Y.Yasser