UAE private sector businesses hit highest rate of growth in 30 months helped by Expo boost: IHS Markit survey

Dubai: Private sector business activity in the UAE had another solid showing in November, with the rate of growth recording its best performance in nearly 30 months. New orders also improved, with a lot of it being a direct contribution from the Expo.

There was an increase in overall demand as the country “re-opened to tourism and benefited from the Expo 2020,” according to a new update. Export sales were also ticking higher, but at a slower pace than the total new business generated for November.

However, new job creation is still on the slower side, with businesses intent on putting a tight lid on costs, according to the latest PMI (Purchasing Managers Index) report from IHS Markit, the research consultancy. "The stagnation of hiring activity suggested that businesses are delaying staff decisions until they know the full extent of the economic recovery following the Expo,” said David Owen, Economist at the firm. “That said, further rises in demand and backlogs could support an increase in employment sooner rather than later."

The UAE PMI – which is a measure of how non-oil private sector businesses have performed in a month – had a reading of 55.9 for November, up from October’s 55.7. A score above 50 indicates gains for businesses and the wider economy.

Some concerns

But there was some dip in business sentiments during the month, which Owen says is because “firms indicated that high competition had clouded their sales forecasts. Output prices were subsequently lowered for the fourth month running, while there was little change in staff levels despite growing capacity pressures.”