Choose your website and language
Khatija Haque - Head of Research & Chief Economist
Published Date: 07 December 2021
The UAE’s Purchasing Managers’ Index (PMI) rose to 55.9 in November from 55.7 in October, indicating a strong improvement in business conditions last month. Business activity/ output growth accelerated, as did new order growth. Both indices are at the highest level since mid-2019. The main driver appears to be domestic demand, although export orders did pick up slightly in November.
Despite the robust increase in the pipeline of new work and business output, employment in the private sector was largely unchanged in November from October. Staff costs declined slightly for the second consecutive month. Business optimism dipped a little as well, suggesting that firms are still uncertain about the outlook post-Expo2020, which may be why they are reluctant to boost hiring despite rising backlogs of work.
Supplier delivery times improved again in November and input costs increased at the slowest rate since May. Despite higher input costs, firms reduced selling prices at the fastest rate in a year, citing increased competition.
Overall, the November survey supports our view that the UAE will see stronger GDP growth in Q4 of this year, as a result of easing travel restrictions and Expo 2020 activity. The emergence of the Omicron variant increases uncertainty about the outlook for Q1 2022, although at this stage travel restrictions have only been incrementally tightened.
Source: IHS Markit, Emirates NBD Research
Dubai PMI slips but still strong in April