Dubai new order inflows grow fastest since August

New order inflows in Dubai grew the fastest in November since August, recent data showed.

The UAE non-oil economy continued to show a solid rate of expansion in November, according to the latest PMI survey data.

Strong demand conditions and competitive client pricing supported a faster increase in new business, which in turn drove another robust uplift in business activity.

The seasonally adjusted S&P Global UAE Purchasing Managers’ Index (PMI) – a composite indicator designed to give an accurate overview of operating conditions in the non-oil private sector economy – registered 54.2 in November, up slightly from 54.1 in October. The index was firmly above the 50.0 no-change threshold, indicating a robust improvement in the health of the non-oil economy.

The Dubai PMI climbed to 53.9 in November, up from 53.2 in October but slightly below the UAE PMI.

Driving stronger operating conditions across Dubai was a marked increase in new order inflows, which was the fastest since August and stronger than seen nationwide.

Client sales were often aided by lower prices, according to anecdotal reports. Rising sales led to another robust increase in business activity.

Employment levels nonetheless dropped for the first time since April 2022, albeit fractionally. The reduction came as output expectations slipped to a 23-month low, and margins were further squeezed by rising purchase prices. Also,inventories were cut for the first time since July. Output charges fell for the second straight month despite asharp uplift in input costs.

David Owen, Senior Economist at S&P Global Market Intelligence, said: “The UAE PMI was consistent with a solid rate of growth across the non-oil private sector in November. Businesses continued to see a marked upturn in sales, which spurred activity forwards but also greatly added to outstanding work. Employment growth slipped to a 31-month low, while input purchases rose at the slowest pace since July 2023. Despite the positive headline figure, the survey data signalled a degree of uncertainty among firms about how long this strength will last. Confidence in future business activity was relatively subdued - the second-lowest since early last year - and there were further mentions from panellists that markets are becoming crowded, curbing pricing power.”

Amid subdued job creation and limited efforts to store extra inputs, capacity pressures at non-oil firms remained elevated in November. Meanwhile, businesses cut charges again despite a solid increase in costs.

That said, the rate of growth remained slower than those observed earlier in the year, S&P Global said in a statement.

Despite higher costs, non-oil businesses opted to reduce their selling charges, carrying on a renewed period of discounting from October. A desire to offer more competitive prices frequently drove firms to lower their fees, although the overall pace of decline was modest.