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A rapid growth in new orders and resulting capacity pressures led UAE's non-oil private sector to increase staffing levels, according to a latest business survey.
The seasonally adjusted S&P Global UAE Purchasing Managers' Index (PMI) ticked up to 55.9 in March from 54.3 in February signaling a sharp and quicker improvement in the health of the sector.
The 1.6-point rise in the index was the largest month-on-month uplift since October 2021, "with all five sub-components providing a positive directional influence".
The Employment Index rose to its highest reading since July 2016. "The sub-indices for employment and stocks of purchases rose to 80- and 60-month highs respectively, signalling notable uplifts in staffing numbers and inventories in the latest survey period," said David Owen, Senior Economist at S&P Global Market Intelligence.
The expansion was underpinned by a robust increase in new order intakes, with the rate of growth accelerating to a five-month high, albeit remaining below the post-COVID-19 peak seen in late-2021. Similarly, output levels expanded at the quickest rate for five months.
Inflationary pressures were still mild despite stronger market conditions and increased staffing demand driving a quicker rise in wages. "This allowed firms to reduce their output charges further in the face of strong market competition, with a number of panellists mentioning extra discounts to customers," said Owen.
Purchasing activity improved in March with data indicating the fastest expansion in holdings of raw materials and semi-finished items in exactly five years. The efforts suggested efforts to replenish stocks and build inventories for new projects underlined the upturn.
However, the uplift in purchasing activity was much softer than in February, and firms also experienced a slower improvement in delivery times.
Looking ahead, the panellists' optimism over future activity strengthened to a five-month high in March. Firms were generally hopeful that continued market growth will provide increased opportunities over the next 12 months
(Writing by Brinda Darasha; editing by Seban Scaria)
