Private sector activity in Dubai has shown another notable improvement in August, with the Dubai Purchasing Managers’ Index (PMI) reaching 53.6, up from 53.5 in July. This reflects a robust enhancement in the conditions of the non-oil private sector economy. Companies expanded their production at the fastest rate in seven months, driven by increasing customer sales and project activity, according to participants in the study. Overall demand also experienced growth.
Data from the PMI study in the UAE indicates an uptick in production growth and business confidence.
The S&P Global PMI for the UAE increased from 52.9 to 53.3 in August. The index remained above the neutral level of 50, suggesting improvement in economic conditions. The rise in the PMI was partly due to a significant expansion in production levels during the mid-third quarter of the year. In fact, this uptick in activity was the fastest seen in the past six months, slightly better than the long-term average of the survey.
Many committee members noted that an increase in sales, ongoing project activities, and growth in local markets supported this recovery. The survey data also indicated a slight improvement in supplier performance in August. However, non-oil businesses reduced their purchases of production inputs during this month, marking the first decline in acquisitions in just over four years.
The UAE experienced a slight rise in employment rates across various non-oil sectors. Conversely, non-oil companies raised their sales prices at a quicker pace. Although the overall increase was modest, it was the steepest in five months and among the highest rates in the history of the series. According to firms, the price increase reflects rising costs and strong sales.
Finally, production expectations improved in August, with companies reporting the highest level of confidence since last October. Many firms expressed hope that stable local economic conditions and strong customer relationships would foster growth over the next year.
David Owen, Senior Economist at S&P Global Market Intelligence, stated, “Purchasing price inflation decreased in August, countered by rising wage inflation as employment activity remained strong, accompanied by rising living costs enhancing demands for salary increases.” Sales prices also rose at a faster pace in August.