T he UAE’s non-oil business sector expanded at a fast pace in September on the back of a record increase in output and increased sales, coming in at 56.7, up from 55.0 in August, according to S&P Global UAE purchasing managers’ index (pdf). New orders climbed to their highest level since June 2019 on the back of increased demand, especially from foreign clients.

REMEMBER- The threshold separating contraction from growth is 50.0, with anything over 50 denoting expansion, and anything below indicating contraction.

Surveyed firms pointed to increased demand, especially from foreign clients, which helped lower prices amid competitive pressures. Business output also expanded, with growth picking up from August’s 7 month low, and was softer than recorded for new orders.

Input costs rose slightly during the month, which led to some firms raising their charges, though most reduced them to stave off competition.

Supply chains also improved with delivery times shortening to the greatest extent since July 2019. Inventories of inputs rose at its softest pace in 14 months as firms faced greater drawdown to meet new orders, leading to an increase in purchasing activity, according to the survey. Employment also rose at its softest pace in seven months, while backlogs grew at their softest pace in over two years, an indication that firms had sufficient capacity to handle the influx of new orders, senior economist at S&P David Owen commented.

Looking ahead: Confidence for business growth improved to its strongest since March 2020 for the year ahead, according to the survey.

ICYMI- Saudi Arabia and Qatar’s non-oil private sectors continued to expand in September, while Egypt’s fell further into contraction in September.

Tags: