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The UAE’s non-oil sector reported its second-best performance in nearly five years, with 2023 closing on a strong note according to the S&P Global Purchasing Managers’ Index.
Favourable economic trends, coupled with an upturn in new business intakes drove the UAE’s PMI up from 57.0 in November to 57.4 in December, the second-highest reading since June 2019.
Businesses witnessed a surge in trade with increased order book volumes and improved sales pipelines. The rise in output was somewhat supported by firms' ability to complete work on time, evidenced by slight uptick in backlogs.
Companies in the non-oil sector also recorded a moderation of inventory growth in December, reflecting efforts among some businesses to optimise input holdings and costs, which further helped to soften the rate of purchase price inflation to its lowest level in nearly a year.
Purchasing activity continued to rise at a sharp pace in response to positive demand trends, although some businesses opted to streamline stocks amid cost considerations. Subsequently, after reaching a near six-year record, the rate of inventory growth slowed in December to a three-month low.
Companies also expanded their staffing levels to keep up with the uptick in business, with the pace of job creation equalling the series long-run trend.
According to data, economic projections indicate robust growth in the UAE is expected to continue into the New Year, reaching pre-COVID highs in terms of future activity.
(Writing by Bindu Rai, editing by Brinda Darasha)
