UAE non-oil companies saw a significant increase in new business in October, driven by higher costs and tourism, with the opening of the expo, and production levels rose at a strong rate for more than two years, while confidence in future operations improved. Significantly. The level of optimism after March 2020 was strong.
The index of key purchasing managers (PMI) of the “HS Markit” group in the United Arab Emirates, after adjusting for seasonal factors, rose from 53.3 points in September to 55.7 points in October and above the neutral level of “50.0 points”. , And it was the highest A reading since June 2019, and for the first time since the outbreak, it was higher than the series’ long-term average.
The consolidated index, designed to provide an accurate overview of operating conditions in the non-oil private sector economy, was driven by a rapid increase in both production and new orders compared to the previous month, showing a strong expansion in business conditions in October. To their highest level in more than two years. The expo was launched, which boosted the growth of the non-oil private sector.
Development of new orders
New orders saw sharp growth in October, with demand increasing significantly with the opening of the expo. According to team members, the event led to an increase in sales in several sectors, with increased tourism and increased investment costs.
In response to the strong rise in new business, UAE non-oil companies have sharply raised production levels to their highest level since July 2019. In addition to the expo, the companies noted that easing epidemic controls also helped boost activity. Despite that, there was a setback in October.
Supplier delivery time was slightly reduced in October as companies indicated that suppliers could face shorter delivery times, despite global supply chain issues. As a result, companies were able to buy more production inputs and increase their inventory.
Recent data point to a slowdown in the overall rate of input cost inflation across the non-oil economy, with purchasing costs rising slightly, while labor costs fell for the first time since January.
The average selling prices of non-oil producing companies fell in October, and in the light of the continued efforts of companies to maintain their competitiveness and attract more customers, more rapid sales growth encouraged some companies to raise their selling prices.
Finally, amid expectations that the positive impact of Expo ID may continue, expectations for future production improved significantly in October.
“The growth in both manufacturing and new business has been sharp, strong since July 2019, and the increase in sales has led companies to expect performance to increase over the next 12 months,” said David Owen, his market economist. The level of confidence has been at a very high level since the onset of the epidemic.
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