November saw a sustained vibrancy in the UAE’s non-oil private sector economy, propelled by a sharp rise in new business activities and robust demand conditions.
The Purchasing Manager Index (PMI) remained at 57.0, following October’s four-year high of 57.7, driven by significant input stock-building efforts.
Factors Driving Growth:
Amidst a buoyant market, increased demand, new clients, project inquiries, and marketing endeavors continued to bolster new orders, maintaining growth momentum within the sector, as highlighted in S&P Global’s PMI report.
David Owen, senior economist at S&P Global Market Intelligence, emphasized the rapid surge in input buying to leverage growth opportunities.
This led to the fastest stock buildup since July 2019, benefiting local businesses and trade partners. However, concerns about an influx of firms entering the market tempered long-term business optimism.
Economic Projections and Sectoral Growth:
Predictions from the International Monetary Fund (IMF) and the World Bank indicate a positive trajectory for the UAE’s real GDP, expecting growth of 3.4 percent in 2023 and 4.0 percent in 2024.
Multiple sectors, including real estate, construction, retail, and technology, are primed for growth, contributing to the optimistic economic outlook.
Mid-Year Growth and PMI Signals:
The first half of 2023 showcased a robust non-oil sector performance, with a significant 5.9 percent surge in growth, outpacing overall GDP growth.
The S&P PMI signaled a rapid improvement in operating conditions, highlighting strong trends in new business, output, and inventories.
Challenges and Market Dynamics:
While the expansion in sales remained one of the fastest in years, some firms observed increased competitive pressures and a subdued rise in new export business, contributing to a drop in business confidence levels.
This caution impacted staffing growth and slight salary increases despite the overall positive growth trajectory.
