Stock Abu Dhabi skyline
April's private sector activity threw up some confidence boosting numbers in terms of new order volumes and pick up in overall business activity. The only slackness remains in job creation. Image Credit: Ahmed Ramzan/Gulf News

Dubai: New orders and business activity improved for UAE’s private businesses during April, showing further signs of “continued economic recovery” from COVID-19’s impact.

But for those seeking a new job opportunity or a change of organisation, the picture is not yet turning rosy. In fact, employment numbers within the UAE private sector fell for a third straight month, according to the latest monthly update from IHS Markit.

"Firms also saw capacity pressures emerging in April, indicated by an increase in backlogs," said David Owen, Economist at the research firm. "Employment has been slow to react to rising demand so far this year, having fallen for three months in a row, but could start to rise as these pressures intensify.”

UAE businesses will have these concerns
Backlogs rose for the first time in eight months, "partly due to a delay in input shipments faced by some companies".

Another factor causing higher volumes of outstanding business was a slight fall in employment as firms
decided to contain payroll costs rather than increase operating capacity.

Buoyed by new orders

The biggest contributor for the rise in activity – and sentiments – was new orders. “Surveyed firms reported that market conditions had generally improved due the rollout of COVID-19 vaccines and strengthening business confidence,” the report states. “Firms also saw a rise in new export orders, although the upturn was more modest than that of total sales, suggesting that demand growth was mainly domestic based.”

The ‘New Orders Index’ in April represents a 20-month high. Inflationary pressures have also eased up from previous months.

Import costs

Prices of chemicals and metals such as aluminium were firming up, as did freight charges. Overall cost pressures increased for the third month in a row.