The non-oil business activity growth in the UAE accelerated in March, recording its largest month-on-month rise since October 2021, supported by new orders and jobs growth, a survey released Wednesday showed.
The seasonally adjusted S&P Global UAE Purchasing Managers’ Index (PMI) rose to 55.9 in March from 54.3 in the previous month, with all five sub-components providing a positive influence.
The survey showed that the employment index was a standout of the sub-indices, which rose to its highest reading since July 2016 and signaled a solid boost to the workforce. S&P Global said the increase in employment levels reflected the recent trend of improving demand conditions.
Underlying new business growth peaked at a five-month high in March as companies highlighted strong market demand and increased tourism. The upturn during the month was predominantly driven by domestic sales.
Overall, export business in March was broadly stable after seeing a three-month sequence of decline. Meanwhile, an improved momentum was seen in non-oil businesses with regard to inventories.
“The latest PMI reading of 55.9 in March reflected concerted efforts by non-oil companies to boost their capacity levels in the face of strengthening demand conditions,” David Owen, S&P Global Market Intelligence senior economist, said in a statement.
According to Owen, firms in the country still benefit from relatively marginal inflationary pressures, despite stronger market conditions and increased staffing demand driving a quicker wage rise.
Owen said this allowed businesses to reduce their output charges further in the face of strong market competition. He added that several panelists even mentioned extra discounts to customers.
The non-oil economy’s future activity outlook strengthened to a five-month high in March and was aligned with the average sentiment level seen since the COVID-19 pandemic began.
“Firms were generally hopeful that continued market growth will provide increased opportunities over the next 12 months,” S&P Global said.
The country’s economic diversification efforts have helped in its positive performance, with credit ratings agency Moody’s affirming the UAE’s Aa2 long-term local and foreign currency issuer ratings, also indicating a stable outlook.
