UAE’s Non-Oil Economy Sees Solid Growth in November Amid Rising Orders

PMI Reflects Robust Expansion Despite Signs of Caution

The UAE non-oil economy maintained a strong growth pace in November 2024, with new orders increasing at their fastest rate since August, the S&P Global survey reported. This growth was driven by both strong demand conditions and competitive client pricing, which led to another significant uplift in business activity.

The seasonally adjusted S&P Global UAE Purchasing Managers’ Index came in at 54.2 in November, marginally higher than October’s 54.1. Remaining firmly above the neutral 50.0 threshold, the index continues to illustrate an improving health of the country’s non-oil sector.

According to Senior Economist at S&P Global Market David Owen, the increase in sales performance was the source of strength in overall activity. “Businesses continued to see a marked upturn in sales, which spurred activity forward but also greatly added to outstanding work,” Owen stated. Yet, he pointed out a notable slowdown in employment growth, which hit its lowest level in 31 months. 

Uncertainty Casts a Shadow Over Business Confidence

Despite the positive headline PMI figures, Owen emphasized concerns regarding the sustainability of this momentum. “Confidence in future business activity was relatively subdued – the second-lowest since early last year,” he remarked. Survey participants also mentioned increasing market saturation, which has been curbing pricing power and adding a degree of uncertainty to the outlook.  

Dubai’s PMI Also Sees Improvement

In November, Dubai’s Purchasing Managers’ Index rose to 53.9 from October’s reading of 53.2, marking an improvement in the performance of the emirate’s non-oil private sector. Growth was mainly due to a sharp increase in new orders, which were recorded at their fastest pace since August, significantly contributing to the strong expansion in overall sales and business activity.

Despite this positive momentum, the report pointed out challenges in other areas. Employment levels in Dubai fell slightly, representing the first decline since April 2022. In addition, output expectations decreased to its lowest level in 23 months, which suggests a more cautious business outlook. It experienced increasing pressure on profit margins from still-on the rise purchase prices, while inventories contracted for the first time since July, signaling that businesses had begun getting tighter on managing stock levels. 

The data paints a picture of a non-oil economy that is dynamic yet uncertain. While strong demand continues to fuel growth, challenges like pricing pressures, cautious sentiment, and unpredictable market conditions are creating obstacles that could impact the sector’s future performance.