As new business soared and output increased, the non-oil private sector in the United Arab Emirates saw its greatest expansion in seven months in September. The S&P Global UAE Purchasing Managers’ Index (PMI) increased from 53.3 in August to 54.2, indicating a strong and rapid improvement in business conditions outside of the oil industry.
The headline PMI jump concealed a more profound change: businesses reported a dramatic increase in new orders, especially from the domestic market, which increased output and encouraged the hiring of workers. Due to intense competition, businesses were nevertheless careful about pricing and inventory accumulation.
Following a slowdown in August, when new orders fell to their lowest level in more than four years, demand sharply increased in September. The sub-index for new orders jumped from 53.1 to 57.2, indicating the highest intake since February. More than 30% of businesses surveyed reported an increase in order volumes. Although export orders grew at a slower rate, domestic demand drove the recovery. Consequently, production reacted favorably and displayed one of the quarter’s more notable monthly gains.
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