DUBAI (Reuters) – The United Arab Emirates' non-oil private sector grew at the fastest pace in nine months in December, driven by strong demand and increased business activity, a survey showed on Monday.
The seasonally adjusted Standard & Poor's Global UAE Purchasing Managers' Index rose to 55.4 in December from 54.2 in November, remaining well above the 50.0 level that separates growth from contraction, and was the third monthly increase in a row.
The survey highlighted a sharp rise in new business with the new orders sub-index rising to 59.3 from 58.0 in the previous month, indicating strong demand. However, export demand growth declined, with this sub-index falling to its lowest level in seven months.
Backlogs also continued to build at a rapid pace in December.
“Capacity levels remain under significant pressure, as evidenced by another notable increase in backlogs,” said David Owen, chief economist at S&P Global Market Intelligence.
“While margin constraints appear to be preventing some companies from hiring more staff… there is certainly a need to bolster resources to ensure companies benefit from demand in the new year.”
Despite the increase in demand, employment growth has remained sluggish, with job creation at one of the slowest rates in more than two and a half years.
But input cost inflation fell to its lowest level since March 2024, providing some relief to companies as companies continued to discount prices amid strong competition.
However, business confidence in future business activity remained weak in December.
For Dubai alone, the headline PMI rose to 55.5 in December from 53.9 in November, indicating the strongest growth in operating conditions there in nine months.
