Non-oil private sector businesses in Dubai enjoyed robust performance in February on the back of an increased volume of new orders, prompting companies to hire more people at the fastest rate in the last eight years, a business survey revealed on Monday.

While favourable market conditions continued, cost pressures remained modest, and several firms accumulated inventories of inputs rapidly due to reports on shipping delays.

At 58.5 in February, the S&P Global Dubai Purchasing Managers' Index (PMI) posted a strong uptick from January's 56.6, indicating an improvement in operating conditions across the emirate's non-oil economy.

The reading matched that recorded in May 2019 and was therefore also the joint-highest seen in just over nine years, S&P Global said.

"In fact, the reading signals that the Dubai non-oil sector is one of the fastest growing worldwide according to global PMI data. Output and new order volumes are proving especially robust, with companies reporting new clients, higher demand and a still improving economy post-pandemic," David Owen, Senior Economist at S&P Global Market Intelligence, said.

According to the PMI survey, over a third of respondents (36%) saw their output increase since the previous survey period, signalling the fastest upturn in one-and-a-half years.

Average output charges decreased at the fastest pace in eight months, with the most prominent reduction seen in the wholesale and retail sector.

Employee recruitment activity improved due to greater workloads. The pace of job creation quickened to the sharpest recorded since August 2015.

"Inflationary pressures remained soft which encouraged greater sales promotions, while employment and inventory growth strengthened. All this suggests that the non-oil sector's expansion has further to run during 2024," Owen said.

Dubai's non-oil firms had a positive view compared to that seen in January, with around 19% of survey respondents expecting output to grow and the rest remaining neutral, the PMI survey noted.

(Reporting by Seban Scaria; editing by Daniel Luiz)
(seban.scaria@lseg.com)