2023-12-06 21:02:29
Mustafa Abdel Azim (Dubai)
New business flows in the UAE recorded a noticeable increase during last November, supported by the continued momentum of the recovery of the non-oil private economy in the last quarter of this year, according to the results of the Purchasing Managers’ Index for the UAE issued by Standard & Poor’s Global.
The index results showed a noticeable increase in purchasing activity across the non-oil private sector economy in the UAE in November, driven by a sharp increase in new business inflows and efforts to quickly replenish and increase inventory in the face of strong demand rates, as the rise reached its peak in the largest increase in inventory levels since Nearly six years, putting some pressure on supply chains and material prices.
Overall cost inflation remained stronger than recent averages, but selling prices remained broadly stable.
The UAE’s main seasonally adjusted Purchasing Managers’ Index, affiliated with Standard & Poor’s Global – a composite index designed to give an accurate overview of operating conditions in the non-oil private sector economy – recorded 57.0 points in November, following recording its highest reading. In more than 4 years in October, 57.7 points.
The index indicated that operating conditions improved rapidly in the middle of the fourth quarter, supported by strong trends in new business, production and inventory.
The rate of new orders remained within the growth range, as increasing demand, new customers, project inquiries and marketing efforts drove growth, and although the expansion in total sales was one of the fastest rates recorded in nearly four and a half years, it slowed significantly. Since October, some companies have observed greater competitive pressures and a lower uptick in new export business.
Production levels in the non-oil economy rose significantly during November, and the growth rate rose to its highest levels since June.
Purchases of inputs expanded rapidly in November, as companies sought to maintain strong inventory volume due to strong demand, while the rate of purchases rose to the highest degree since July 2019, leading to the largest increase in inventory in nearly six years.
Non-oil companies continued to benefit from the ability of suppliers to reduce delivery times at the request of companies, and at the same time, companies saw another strong increase in purchasing prices, which, although declining since October, was the second fastest increase since mid-October. In 2022, a small number of companies resorted to raising production prices, although this was met with price reductions in other companies and led to a broad stabilization of overall production prices.
David Owen, a senior economist at Standard & Poor’s Global Market Intelligence, said that strong demand growth in the non-oil economy in the UAE led to a rapid increase in the purchase of production inputs during the month of November, as companies sought to ensure that they were in a position to benefit from… Growth opportunities.
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