PC: Gulf Business
S&P Global has mentioned that improved business conditions and increasing new orders are supporting the steady growth of the UAE’s non-oil private sector. The report from the financial services company stated that the Purchasing Managers’ Index of the country stood at 55 in February.
This was the same reading as in January and slightly lower than December’s nine-month high of 55.4. “A PMI reading in excess of 50 indicates an expansion in private business conditions; whereas, readings below 50 indicate contraction,” S&P Global said. Strong growth in non-oil business activities in the UAE showcases the broader trend of economic diversification within the Middle East. Mr. Owen, described February as “another solid month” for non-oil businesses in the country. He mentioned that a PMI of 55.0 suggests that growth has remained consistent since its recent peak at the end of 2024.
The analysis also suggested that the growth of business activity accelerated in February and was above the long-term average of 54.4. Companies that were surveyed reported increased output driven by rising levels of new business. This was attributed to improving market conditions, effective advertising practices, and moderated output price pressures.
But some challenges remained, with the report saying competition from domestic and foreign sources hampered growth for some non-oil private firms in February. If there remained limited confidence over future business conditions, this was highlighted by Mr Owen. Price hikes have been curtailed, which is making intense competition more of a problem, he noted, while the rise in costs put slight upward pressure on inflation in selling prices.
Owen remarked that although strong activities in businesses point to these orders eventually being cleared, other aspects like weak job creation and continued delays in administration could jeopardize this outlook. In February, employment growth in the non-oil sector was limited in the UAE, with some firms expanding their workforces to avail capacity, while most firms left their employment unchanged. Even so, non-oil firms had difficulty securing payments from their clients, with Owen highlighting this as a critical area for effective policy actions.
The report has also shown that Thomas Dubai PMI fell slightly to a three-month low of 54.3 in February from 55.3 in January, indicating a slower pace in the improvement of the Emirate’s non-oil sector.
The percentage of activity in Dubai’s non-oil firms for February grew on the back of stronger demand and softening price pressures. The rate of input price increases was the lowest recorded in four months, with only a modest rise seen for average selling prices. Business expectations in Dubai’s non-oil sector were up to a three-month high in February but still remained quite muted. Private firms, on average, within Dubai had their staffing levels largely unchanged from January, although inventory growth continued to be supported by increased input purchasing, suggesting a positive forecast for future business activity.
