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Tourism sector was a runaway winner during December, while businesses took in more gains from the Expo. Image Credit: Bloomberg

Dubai: Dubai businesses closed 2021 on a high note, with December data showing a ‘rapid increase’ in new orders and strong gains for the tourism sector. New orders were at their highest levels in 29 months, with the private sector seeing more boosters coming out of the Expo and related initiatives.

In fact, new orders during December were back in line with pre-COVID-19 trends, while another key measure – business output – was also rated strong, “expanding at the second-fastest pace since mid-2019,” says the latest IHS Markit findings on the UAE’s PMI (Purchasing Managers Index) numbers.

More signs of job creation

Privately-owned businesses in Dubai were also putting in “more efforts” to raise their workforces. “The expansion was modest but nonetheless one of the strongest recorded since the start of the pandemic.” The report finds. “By contrast, the quantity of inputs purchased by non-oil companies was unchanged, ending a five-month sequence of growth and leading to a slight decrease in inventory levels.”

The seasonally adjusted IHS Markit Dubai PMI rose to its highest level in two-and-a-half years in December. At 55.3, up from 54.5 in November, the PMI signalled a sharp improvement in operating conditions.

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Built around orders

The fuel for the December boost was the strength of new orders landing up at local businesses. The rate, according to IHS Markit, is the quickest since July 2019. “Surveyed businesses highlighted that the rise in new work was often driven by the recent easing of travel restrictions which, along with the Expo 2020, had boosted tourism demand,” the report adds. “Companies also cited an improvement in local sales as consumer confidence grew.”

The Omicron cases worldwide understandably had business owners concerned about prospects in the new year. There were other concerns too. "Inflationary pressures were much sharper, however, as higher energy and raw material costs drove the fastest rise in overall input prices for nine months,” said David Owen, Economist at IHS Markit, “Firms continued to reduce their charges, albeit at a much softer rate than in November.”