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The United Arab Emirates' non-oil private sector recorded its strongest expansion in seven months in September, driven by a sharp rise in new business inflows, according to a survey released on Friday.
The seasonally adjusted S&P Global UAE Purchasing Managers' Index (PMI) rose to 54.2 in September from 53.3 in August, reflecting a robust recovery in demand.
Although the headline index remains below the survey’s long-run average, the latest reading suggests that non-oil business performance has rebounded well since its low point in July, said David Owen, Senior Economist at S&P Global Market Intelligence.
"Over 30% of surveyed firms reported an increase in new order intakes during the month, which drove a sharp improvement in sales growth from its over four-year low in August. The uplift pointed to some positive momentum in the domestic market as export sales growth remained relatively muted,” he said.
The improvement in sales volumes was largely supported by domestic demand, though new orders from foreign clients also saw an uptick.
Purchasing activity increased in September after declining for the first time in over four years in August. However, the report noted that the rise was relatively subdued compared to recent trends, as businesses cited sufficient stock levels, competitive pressures, and pricing concerns as factors limiting buying activity.
Employment levels rose at the fastest pace since May, though the increase remained modest.
Looking ahead, firms remained optimistic about the year ahead, albeit slightly less so than in August, which marked a ten-month high in sentiment.
Dubai keeps pace
Non-oil companies in Dubai also saw a notable boost in sales at the end of the third quarter. The Dubai PMI climbed to 54.2 in September from 53.6 in August, mirroring the broader UAE trend.
Firms reported a sharper increase in new work compared to August, with the pace of sales growth accelerating to an eight-month high, following only a modest upturn the previous month.
(Writing by Brinda Darasha; editing by Daniel Luiz)
