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The UAE's non-oil economy grew in August at its fastest pace in over three years as business conditions continued to improve on higher sales, according to a survey released on Monday.
The seasonally adjusted S&P Global UAE Purchasing Managers' Index (PMI) rose from 55.4 in July to 56.7 in August, the highest recorded reading since June 2019.
Businesses polled for the survey said that output growth strengthened due to a sharper increase in new orders during the month. Sales also grew at the fastest rate in more than three years, which firms attributed to increased client demand and price promotions.
However, new export business posted a marginal growth and was at the weakest since January 2022, while business confidence for the coming year was at its lowest in over one year.
"The UAE PMI continued to trend higher in August, reaching a 38-month high... to signal a robust improvement in business conditions in the non-oil economy. Sales growth picked up even further, supported by additional efforts to provide discounts to clients," said David Owen, economist at S&P Global Market Intelligence.
Owen said that input costs fell for the first time since the beginning of last year, as fuel prices led to price declines and business outgoings.
"The renewed decrease marked a considerable turnaround in inflationary pressures, which had reached an 11-year high in June," Owen said.
Despite positive signs for output and new orders, businesses are not too upbeat that the strong growth pace would continue.
"Business confidence for the coming year was down to a 17-month low in August, amid warning signs that the global economy could enter a recession towards the end of the year," Owen noted.
(Reporting by Cleofe Maceda; editing by Seban Scaria)
