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Regional PMIs: UAE PMI slips in November on slowing global growth

Khatija Haque - Head of Research & Chief Economist
Daniel Richards - MENA Economist
Published Date: 07 December 2022



The S&P Global UAE PMI slipped to 54.4 in November from 56.6 in October, and was the lowest reading since January. The weakening global growth backdrop led to slower growth in new work last month, with this component of the survey at a 14 month low. Business activity increased sharply in November but also at a slower place than in October.  Firms continued to increase staffing, but at a very modest rate. Backlogs of work increased in November but at the slowest pace in several months.  Encouragingly, input costs pressures were muted last month and firms kept selling prices largely unchanged. Firms were less optimistic about the outlook for the coming year, as the global outlook deteriorates, but noted that domestic demand conditions were supportive.

The survey data is in line with our expectations of softer non-oil sector growth in 2023 after a strong performance in 2022. Tighter monetary and financial conditions are expected to curb global activity – including merchandise trade - and a strong USD is a further headwind to growth in the region. However, we still expect robust growth of 3.5% in the UAE’s non-oil economy next year, underpinned by structural reforms and targeted public sector investment.

UAE PMI: New work growth slowed in November

Source: S&P Global, Emirates NBD Research

Saudi Arabia

Business conditions in Saudi Arabia improved sharply in November as output grew at the fastest pace in more than seven years, while new order growth was the strongest in over a year. The Riyad Bank PMI rose to 58.5 in November from 57.2 in October. Domestic demand remained robust while new export orders rose at the sharpest pace since 2015. The increase in output helped to reduce the backlogs of work even as new orders increased last month. However, employment at private sector firms was only fractionally higher despite the strong increase in activity and new work in October. Firms were also highly optimistic about the outlook for next year on expectations that GRE projects and government spending would support domestic demand.

Price pressures increased markedly in the kingdom last month, with purchase costs up at the fastest rate since June. Firms reported higher raw material costs and the impact of global inflationary pressures. Some firms passed on their higher input costs to buyers, with average selling prices rising at the fastest rate in four months. However, CPI inflation in the kingdom remains low by global standards averaging just 2.3% in the year to October. This reflects the high weighting of housing and food prices in the CPI, both of which have been contained so far this year.  

Overall, the survey data supports our view of strong non-oil GDP growth of 4.1% in Saudi Arabia this year as the government pushes ahead with mega projects and other economic diversification initiatives. We expect non-oil growth to accelerate to 4.5% in 2023, underpinned by continued public sector (including GRE) investment.

KSA: Faster new work growth in November

Source: S&P Global, Emirates NBD Research


Egypt’s PMI survey showed a deterioration in operating conditions for non-oil private sector firms in November. This was the first PMI survey after the new IMF deal was announced in late October, and the associated EGP depreciation and interest rate hike. The headline reading fell to 45.4, from 47.7 in October, the second-lowest level since June 2020.

Firms reported that output was subdued by higher prices which constrained demand, with new orders also falling sharply. Construction and manufacturing were the sectors most affected by the slowdown, according to the S&P Global survey. New export orders contracted again in November, although at a lesser pace than total new orders, as slower global growth weighed on external demand.

Looking at prices, the input price index was at levels last seen in July 2018 as the effect of the pound’s move lower fed through, and over 42% of respondents cited higher input prices compared to the previous month. This was driven by both higher purchase prices, and by higher staff costs, although these rose at a slower pace. On the output side, selling prices increased at the fastest pace in five months, but fewer firms recorded raising their selling prices compared to the high number that recorded higher input prices, implying that firms are absorbing many of the cost pressures for now.

On the positive side, business optimism improved in November compared to the October print. Firms likely welcomed the greater clarity around monetary policy since the announcement of the new IMF deal, but optimism is still subdued. Meanwhile, firms were hiring in November, and at the fastest pace since late 2019, although this was still fairly marginal. Firms reported needing new workers to maintain output and indeed, backlogs of work expanded for the sixth consecutive month.