Dubai: Dubai businesses - especially those in retail, construction and tourism - are adding more staff at the fastest rate in more than 8 years, helped by new orders and demand from consumers. The trend became obvious all through February, based on the latest PMI data from S&P Global.
In fact, Dubai's non-oil private sector turned in its best performance since May 2019, with higher activity growth of 'another upturn in new order volumes, as firms enjoyed favourable market conditions and a positive response to greater sales efforts'.
"The latest results prompted companies to expand their staffing numbers at the fastest rate in eight-and-a-half years," says the report.
The February pick up in jobs comes after three- to four months of relatively subdued hiring, as businesses tried to work out ways to offset costs. Plus, some hiring decisions were delayed as businesses factored in the newly introduced corporate tax requirements. But February seems to have showed a completely revised push towards new staff intakes.
Construction and project management continues to add jobs, as does real estate, where the offplan growth and new launches continue to spur activity. Travel and tourism is heading for another strong first quarter. Retail sector hiring has been more uneven, with new businesses being launched being offset by job losses at some of the established entities.
Stock up
Businesses were also moving faster towards beefing up their stocks, during Ramadan and beyond, and not get disrupted by any of the recurring Red Sea issues.
"Likewise, firms accumulated inventories of inputs and semi-finished items rapidly, despite some reports of shipment delays. Cost pressures remained modest despite picking up to a 3-month high, whereas output charges were reduced at the strongest rate in eight months."
What is the PMI reading for February?
The Dubai PMI closed at 58.5 in February (from 56.6 in January), for its joint-strongest reading since 2015 (matching May 2019). The PMI number is based on business spending patterns, new orders won, costs of operation and hiring activity. It also tracks business sentiments and what owners think about near-term prospects.
February's PMI 'suggests that the Dubai non-oil economy is growing rapidly so far this year', said David Owen, Senior Economist at S&P Global. "In fact, the reading signals that the Dubai non-oil sector is one of the fastest growing worldwide.
"Output and new order volumes are proving especially robust, with companies reporting new clients, higher demand and a still improving economy post-pandemic."
More than a third of respondents to the S&P Global poll saw their output increase in February, which signals the fastest upturn in 18 months. "Increased demand, strong market conditions and greater project work were among the reasons cited by firms for higher output," the poll finds.
Cost under control
According to Owen, "Inflationary pressures remained soft which encouraged greater sales promotions, while employment and inventory growth strengthened. All this suggests that the non-oil sector's expansion has further to run during 2024."
