The non-oil private sector in the UAE witnessed strong growth in August, with firms expressing increased confidence about the future outlook, an economy tracker showed.
The latest S&P Global Purchasing Managers’ Index report revealed that the UAE’s PMI hit 55 in August, slightly down from 56 in July.
Any PMI reading above 50 indicates growth of the non-oil sector, while readings below 50 signal contraction, according to S&P Global.
According to the report, business confidence among firms in August was the highest since March 2020, a strong indication of the economy’s recovery after the pandemic.
“Strong demand conditions across the non-oil economy gave firms greater confidence about the path for future activity, according to the August PMI findings,” said David Owen, a senior economist at S&P Global Market Intelligence.
He added: “The findings suggest that the outlook for the non-oil sector is highly positive, with surveyed firms signaling that this was supported by rising new order inflows, greater tourism and increased investment.”
The PMI report further pointed out that robust confidence among firms underpinned a sharp increase in procurement and sustained job creation in August, supported by subdued cost pressures.
According to the report, non-oil businesses reduced their output charges at the softest pace since March.
While some firms looked to offer discounts, others raised their prices due to higher costs and increased demand, added the report.
“Most PMI indicators continued to give positive signals, including uplifts in input purchases, inventory building, job creation and improving supply chain conditions,” said Owen.
Egypt’s PMI at joint 2-year high in August
Meanwhile, in a separate report, S&P Global noted that the decline in business conditions across the Egyptian non-oil private sector remained mild during August, a strong sign of the market’s recovery.
Egypt’s PMI remained unchanged at 49.2 in August, at its joint-highest level in exactly two years, after enduring a persistent run of contraction.
“The Egypt PMI continued to hover close to the 50.0 neutral threshold in August. The 49.2 reading was the joint-highest in two years alongside July’s figure, as output and new orders fell at modest rates while employment and inventories moved into expansion territory,” said Owen.
He added: “The findings suggest that the sector has somewhat stabilized in recent months after a prolonged period of contraction.”
In August, non-oil companies in Egypt reported relatively modest drops in activity and new orders, amid inflationary pressures.
“A pick-up in inflationary pressures was also indicated by the August survey findings, with some firms noting that a faster increase in input costs had reduced overall activity,” said Owen.