Dubai: New job creation within UAE’s private sector accelerated during October at the ‘fastest pace since July 2016’, according to the latest PMI data from S&P Global. Businesses added to their workforce on the strength of new orders/projects coming through, and which sets them up for a strong finish to the year.
This was also the sixth straight month of new job creation in the UAE. These taken together suggest that businesses are better positioned to manage any further dip in global economic activity leading up to a recession. “The upturn (in October) was led by sharp expansions in business activity and new orders, giving further evidence that domestic firms were not only weathering the global economic storms, but enjoying strong demand growth,” said David Owen, Economist at S&P Global.
The feedback about employment prospects are definitely bullish. Sectors such as retail, travel services, construction all have - or will see - more recruitments in the near term, and with some increases on the pay scales, sources add.
The other major positive for businesses was the lower fuel and transportation costs. The inflationary pressures during the month was rated ‘mild’. “Input costs rose only slightly, helped by reductions in fuel and transport costs in line with recent falls in global oil prices,” said Owen. “This meant that businesses were able to lower their output charges, although the rate of discounting eased to the softest since July."
The October PMI (Purchasing Managers Index) was at 56.6, and just short of the 56.7 in August last, which was the highest over the last three years. (The Index provides an insight into business activity over a month, based on key factors such as new orders won, the cost of operations, etc.)
"Firms also looked to stock up on inputs as they prepare work schedules to address their backlogs, leading to a rapid increase in purchasing activity that was the fastest for over three years," said Owen.
Offset inflation increases
Businesses are stocking up with an eye on offsetting any increases there might be in the near term. Such purchases, according to S&P Global, ‘rose to the greatest extent since mid-2019’.
New order inflows were up at a 'steep and accelerated rate', with firms posting the joint-strongest expansion for 11 months. "Some panellists cited that new clients, lower prices, improved services and the upcoming FIFA World Cup in Qatar had contributed to the rise in sales," the report adds.