The UAE’s non-oil economy continued its strong performance in November 2024, driven by surging new orders and solid business activity, according to the latest S&P Global Purchasing Managers’ Index (PMI). The seasonally adjusted PMI rose slightly to 54.2 in November, up from 54.1 in October, remaining well above the neutral threshold of 50.0, which signals growth.
Business Activity Accelerates Amid High Demand
New orders increased at their fastest pace since August, supported by strong demand conditions and competitive client pricing. David Owen, Senior Economist at S&P Global Market Intelligence, said businesses experienced a “marked upturn in sales,” which boosted activity despite creating a backlog of outstanding work.
However, employment growth across the non-oil sector slipped to a 31-month low, signaling cautious hiring strategies amid economic uncertainty.
Mixed Confidence in Future Growth
Despite robust growth indicators, businesses showed subdued confidence in future activity. “Confidence in future business activity was relatively subdued – the second-lowest since early last year,” Owen noted. He also highlighted concerns over market saturation and reduced pricing power as businesses navigate increasingly crowded markets.
Dubai’s Economy Also Expands
In Dubai, the PMI climbed to 53.9 in November from 53.2 in October, reflecting an acceleration in new orders and rising sales. However, the emirate faced similar challenges, including marginal employment declines for the first time since April 2022 and squeezed margins due to rising input costs. Inventories also fell for the first time since July, suggesting cautious stock management among firms.
Looking Ahead
While the UAE’s non-oil economy maintains strong momentum, the data points to underlying uncertainties. Concerns over competition, price pressures, and subdued business confidence could influence the sector’s trajectory in the coming months.
