A recent monthly survey conducted shortly before the United States and Israel launched airstrikes on Iran indicates that the non-oil private sector in the UAE experienced its fastest growth rate in 12 months during February, driven by increased production and new orders.
The UAE’s Purchasing Managers’ Index (PMI), released on Wednesday and seasonally adjusted, rose to 55 points in February from 54.9 in January. This figure remains significantly above the neutral threshold of 50 points, indicating expansion, with robust growth noted in the construction, real estate, logistics, and technology sectors.
New orders continued to grow rapidly, supported by domestic demand, although the pace of growth slowed from the nearly two-year high recorded in January.
The sub-index for new orders fell to 59.5 in February, down from 60 points the previous month.
David Owen, chief economist at S&P Market Intelligence, stated that the data thus far points to a positive outlook for the local economy in the first quarter.
The UAE, particularly Dubai, serves as a commercial and tourist hub in the region and is a leader in economic diversification efforts in the Gulf aimed at reducing reliance on oil and gas revenues.
However, the strikes on Iran since Saturday have resulted in the most significant disruption to business in the region since the COVID-19 pandemic, leading to airport closures and halted port operations.
The repercussions are likely to impact critical sectors, including tourism and logistics.
The February survey revealed a decrease in input cost pressures, with inflation retreating from an 18-month peak recorded in January, while employment levels rose slightly as companies expanded their workforce to manage increasing workloads. In Dubai, the main PMI also fell to 54.6 in February, down from 55.9 in January.