With output and new orders rising strongly, business conditions in the UAE’s non-oil private sector improved in September, a business survey showed on Tuesday.
Business expectations improved for the first time in three months, as firms expect a pick-up in activity from Expo 2020 Dubai. However, job creations slowed, the survey noted.
The seasonally adjusted IHS Markit UAE Purchasing Managers' Index (PMI), which covers manufacturing and services, dipped slightly to 53.3 in September from 53.8 in August.
David Owen, Economist at IHS Markit, said: "With the Expo 2020 beginning, the UAE economy appears in a good shape. The PMI ticked down to 53.3 in September but still pointed to a strong improvement in non-oil business conditions, as firms continued to see a recovery in demand from the pandemic. A loosening of global travel measures helped to support the rise in new business."
New orders were also up strongly in September. According to respondents, a continued recovery in footfall and contracts related to Expo 2020 had contributed to the upturn, IHS Markit said in its survey.
"Backlogs of work rose to the greatest extent in one-and-a-half years during September, as firms often mentioned not having enough capacity to fulfil new orders whilst working on current projects," the survey said.
Firms reported little change to employment with job numbers rising only marginally since August.
While the rate of stock accumulation at the end of the third quarter was the weakest since May, purchasing activity rose for the third month running.
According to IHS Markit, the outlook for activity in the year ahead improved slightly in September, after slipping to a five-month low in August.
"Firms meanwhile expect the Expo 2020 to add to sales volumes in the coming months, supporting a pick-up in business expectations for the first time since June," Owen said.
(Writing by Seban Scaria; editing by Daniel Luiz)
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