Dubai: UAE businesses recorded the highest growth in 4 years on new orders during September, but slowed down when it came to adding to their workforce.
There are reasons for the going slow on staff numbers – UAE businesses’ backlog of work rose at the slowest pace in 2 years, which meant they didn’t have to hire more to handle the load. So, from a bottom-line perspective, the UAE non-oil private sector is doing quite well.
Businesses will continue to preserve cash where possible, as they await the decisions on whether the US Federal Reserve is planning more rate hikes. Or will stop with another one. Either way, the interest rate cost on their operations are starting to build up. Multiple sectors have been following the path of fewer hires as they navigate the final weeks to year's end.
Whatever be the status on job creation. confidence within the UAE private sector is now up to highest level since March 2020, which, incidentally, was the month before Covid became a factor.
56.7The UAE PMI for September, with business confidence returning to its highest levels since March 2020
A boost for PMI
All this helped the overall PMI for September, which closed with a score of 56.7 from 55 in August. Anything over 50 suggests an economy in growth mode, with businesses in expansion mode.
“The UAE PMI (Purchasing Managers Index) recorded its first uptick for three months in September, driven by a much sharper rise in new work intakes than one month ago,” said David Owen, Senior Economist at S&P Global Market Intelligence. “In fact, the upturn in new work was the fastest since June 2019, supported by new client wins both domestically and in export markets.”
Market sources say that not all sectors are going slow on new staff intake. Tech industry continues to hire, and there have been significant increases in pay scales and incentives.
Price discounting at (UAE) businesses continued, albeit to only a modest degree, suggesting that competition had limited pricing strategies
As for new business wins, 'New orders from foreign clients rose at a marked pace that was the sharpest seen in just over four years', says the S&P Global report.
"Demand growth meanwhile spurred greater purchasing at non-oil firms in September, which acted to quicken the pace of purchase price inflation," said Owen. "Price discounting at businesses continued, albeit to only a modest degree, suggesting that competition had limited pricing strategies."