The seasonally adjusted S&P Global UAE Purchasing Managers' Index (PMI) increased to 55.4 in December, up from 54.2 in November, marking the third consecutive month of growth.
Strong demand and increased business activity propelled growth in the UAE’s non-oil private sector to its fastest rate in nine months this December, according to a survey released by S&P Global on Monday.
The seasonally adjusted S&P Global UAE Purchasing Managers’ Index (PMI) climbed to 55.4 in December, up from 54.2 in November, marking the third straight month of growth and staying above the 50.0 mark, which indicates expansion.
The survey highlighted a significant increase in new business, with the new orders subindex rising to 59.3 from 58.0, indicating strong demand. However, export demand growth weakened, with that subindex reaching a seven-month low.
Capacity challenges and recruitment issues
Backlogs continued to grow quickly, indicating capacity strains.
"Capacity levels remain under considerable stress, shown by another sharp increase in backlogs of work," noted David Owen, senior economist at S&P Global Market Intelligence.
"While some firms are being held back from hiring more staff due to margin constraints, there is a definite need to increase resources to capitalize on demand in the new year."
Sluggish job growth, decreasing cost pressures
Despite the rising demand, job growth remained slow, with employment creation at one of its slowest paces in over two and a half years.
However, input cost inflation fell to its lowest level since March 2024, offering some relief to businesses. Many companies continued to cut prices amid strong competition.
Despite robust expansion, business confidence remained muted, indicating that firms are cautious about future conditions.
In Dubai, the UAE’s commercial hub, the headline PMI increased to 55.5 in December from 53.9 in November, showing the strongest growth in operating conditions in nine months.
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