https://arab.news/wzpnx
RIYADH: Dubai witnessed a strong rise in its non-oil activities during October, as its Purchasing Managers’ Index rose for the second consecutive month to 57.4 from 56.1 in September.
According to the seasonally adjusted S&P Global UAE PMI report, this rise in non-oil activities was driven by swelling demand and growing business confidence.
The report added that new business intakes in Dubai have increased sharply since June 2019.
“Demand momentum in the Dubai non-oil economy is on a steamroll in the latter part of the year, with October PMI data signaling that strong market conditions drove the sharpest rise in new business since June 2019,” said David Owen, senior economist at S&P Global Market Intelligence.
He added: “The uplift was steered by accelerations in multiple sectors, adding further confidence that non-oil growth will be robust in the fourth quarter.”
The PMI report measures changes in output, new orders, and employment, as well as suppliers’ delivery times and stocks of purchased goods.
In effect, any figure above 50 indicates a rise in non-oil activities, while those below signal contraction.
S&P Global further pointed out that the rise in PMI was also pushed by a faster increase in new business volumes and a high sales growth rate, as firms frequently reported new clients and improved market demand.
Companies participating in the PMI survey noted that price discounts supported sales in Dubai during October.
On the flip side, staffing levels rose slightly in October as companies participating in the survey indicated they had sufficient capacity to boost output levels.
“The only lagging indicator is employment, which dropped to a 13-month low and indicated only a marginal rise in staffing during October. The sharp increase in new order volumes suggests that firms will need additional labor in the coming months, although this depends on how much capacity they can build with the existing workforces,” added Owen.
Overall input prices also rose in October at the fastest pace in 15 months on an uptick in supplier prices amid higher demand for materials.
S&P Global added that optimism toward future activities strengthened in October to its highest level since February 2020, with 36 percent of the companies giving an optimistic prediction for output for the coming 12 months.