Sunday, February 25, 2024

Strong increase in private sector output in UAE in November

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The UAE Purchasing Managers’ Index published by S&P Global reported a significant increase in purchasing activity across the UAE’s non-oil private sector economy in November, driven by a strong increase in new business inflows and efforts to rapidly replenish and increase inventory. Face… strong need. The surge culminated in the largest increase in inventory levels in nearly 6 years, putting some pressure on supply chains and commodity prices. Overall cost inflation was stronger than recent averages, but sales prices were broadly stable.
Output levels in the non-oil economy rose sharply in November, and the growth rate rose to its highest level since June. However, the volume of unfilled orders at firms rose, with October data marking the first decline in 28 months.
Input purchases expanded rapidly in November as firms sought to maintain strong inventory levels due to strong demand. The purchases rose to the highest level since July 2019, resulting in the largest increase in inventories in almost 6 years.
The index indicated that operating conditions improved rapidly in the middle of the fourth quarter, supported by strong trends in new business, manufacturing and inventories.
The UAE’s core Purchasing Managers’ Index (PMI), seasonally adjusted, registered 57 points in November, following its highest reading in more than 4 years (57.7 points) in October.
The rate of new orders remained within the growth range due to increased demand, new customers, project inquiries and marketing efforts. While overall sales expansion was among the fastest rates recorded in nearly four-and-a-half years, it has slowed significantly since October, with some companies noting higher competitive pressures and little improvement in new export business.

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On the positive side, non-oil companies continue to benefit from suppliers’ ability to reduce the delivery times required by companies. However, while the decline in delivery times was historically strong, it was the slowest in four months, indicating that strong demand for inputs has somewhat affected supplier capacity.

At the same time, companies saw another strong rise in purchase prices, which, although falling from October, was the second-fastest increase since mid-2022, and some companies raised output prices, although this was offset by price cuts. For other companies, it has broadly stabilized overall production prices.
David Owen, senior economist at S&P Global Market Intelligence, said: “Strong growth in demand from the non-oil economy in the UAE led to a sharp increase in purchases of manufacturing inputs in November. They were in a position to benefit.” Growth opportunities. In fact, the increase in purchases has led to the fastest build-up of inventories in nearly 6 years since July 2019, benefiting local companies and trading partners.

He continued: “However, companies were less optimistic about the path of future operations, as some survey participants reiterated their fears about the large number of companies entering the market. The creation of competition may be a key factor behind efforts to increase inventory, as companies fear an inability to keep up with the fast-growing economy.

Nadia Barnett
Nadia Barnett
"Award-winning beer geek. Extreme coffeeaholic. Introvert. Avid travel specialist. Hipster-friendly communicator."

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