Private sector companies in Dubai, excluding oil production, experienced a significant improvement in operational conditions during November.
The Dubai Purchasing Managers’ Index (PMI) remained steady at 54.5 points for November, indicating a strong enhancement in business conditions, the fastest growth observed since January.
Activity levels have accelerated since October, with sales witnessing a notable increase.
Firms in Dubai also reported a rise in employment figures in the middle of the fourth quarter, marking the most substantial increase in 18 months.
Supply chain conditions improved in November, with delivery times being shortened at the fastest rate in a year. On the other hand, total production costs saw the largest rise since February, primarily driven by employee-related cost pressures, leading companies to pass on some of these increased costs to customers, which resulted in a modest rise in production prices.
Across the UAE, the non-oil private sector observed its fastest expansion in 11 months during November, fueled by strong market conditions that boosted new business growth. This expansion also led to a quicker increase in employment levels, contributing to higher wage costs and overall expenses.
Companies raised their selling prices again in November, aiming to capitalize on strong demand and offset rising production costs. They also expressed slightly greater optimism about activity levels over the next twelve months, with forecasts recovering marginally from the low recorded in October.
The seasonally adjusted PMI for the UAE by S&P Global recorded its highest level in nine months at 54.8 points in November, up from 53.8 points in October and exceeding the long-term average of 54.3 points.
The latest reading indicated strong improvements in business conditions, with firms experiencing increased inflows of new business and generally favorable market conditions.
New business volumes rose in November, achieving the strongest growth rate since January.
Participating companies noted that a supportive market environment facilitated rising customer orders and boosted activity across various sectors. Additionally, they identified product innovation, market diversification, and technology upgrades as key drivers for increased sales.
The surge in new orders led to significant expansion in the non-oil private sector, with firms ramping up production to meet demand. The growth rate of activity is the highest recorded in over a year and a half, matching figures from December 2024, with nearly two-thirds of participating companies reporting increases from the previous month.
Companies also exhibited a greater willingness to hire in November, particularly as sales increases contributed to a sharp rise in outstanding business levels. The survey respondents indicated that pressures on production capacities intensified due to delays in settling payments for previous orders. In response, employment levels rose overall during the month, and although the increase was modest, it was the most significant since May.
Purchasing Activity
Purchasing activity saw an increase, marking the third consecutive monthly expansion after a brief contraction in August. However, most production inputs were consumed in company operations, resulting in a decline in total inventories for the fourth time in five months. Many companies reported maintaining sufficient inventory to support their sales lines, expressing confidence in suppliers’ ability to deliver goods promptly.
Production Costs
In terms of pricing, November data indicated a quicker rise in both input costs and production prices across the non-oil economy. The increase in input costs was the most significant in 14 months, primarily attributed by companies to rising living expenses and improved sales performance, which intensified wage pressures. Notably, total employee expenses climbed to the highest level since April 2018. Simultaneously, companies raised their selling prices at the fastest pace in three months, although the increase remained modest.
Future Activity
Expectations for future activity improved slightly from their lowest level in nearly three years recorded in October.
Over 13% of firms anticipate production will increase over the next twelve months compared to current levels, while less than 1% expect a decline. Many surveyed companies cited strong sales channels and a favorable business environment as key factors supporting their optimism.