RIYADH: An increase in new orders, backed by rising customer demand and softening prices, resulted in a surge in non-oil business activity in the UAE in April, revealed an economy tracker.
The latest S&P Global Purchasing Managers’ Index report noted the UAE’s PMI rose to 56.6 from 55.9 in March, signaling further growth in the Gulf state’s non-oil economy.
According to the report, PMI readings above the 50-mark show non-oil private sector growth, while those below signal contraction.
“The UAE PMI rose for the third month running in April to signal an even stronger rate of expansion across the non-oil economy, driven by rapidly increasing new orders and retreating inflationary pressures,” said David Owen, a senior economist at S&P Global Market Intelligence.
The new orders index rose to its highest level since November 2021 in April, as improving market conditions and increasing client demand underpinned strong sales.
However, this upswing was limited to the domestic market.
The report added that several surveyed companies said the rising new order volumes were supported by increased price promotions in April.
Owen added: “The relatively mild uptick in business expenses encouraged a number of companies to offer price promotions, which helped to drive an upturn in sales that was the sharpest recorded since late-2021.”
Companies also made efforts to increase their capacity levels, which also resulted in creating steady employment opportunities.
“Companies maintained their efforts to build capacity levels, resulting in another marked expansion of input stocks. Employment numbers also grew. While the rate of job creation was slower than March’s near seven-year record, it was still stronger than the survey trend,” Owen said.
The PMI report added that non-oil private sector firms in the UAE were generally optimistic that continued market growth would provide increased opportunities in the coming months.
In March, the Central Bank of the UAE said the country’s economy is expected to expand by 3.9 percent this year and 4.3 percent in 2024. It grew by 7.6 percent in 2022.
The central bank also added that the UAE’s non-oil gross domestic product is expected to accelerate by 4.2 percent in 2023 and 4.6 percent in 2024.
