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Dubai's Non-Oil Sector Grows Near 5-Year High In February
Non-oil business activity in Dubai rose to a five-year high in February, the highest level since May 2019, amid a significant surge in new order volumes, supported by healthy market conditions coupled with stronger sales efforts, a business survey showed Monday.
Non-oil economy
The headline S&P Global Dubai Purchasing Managers' Index (PMI), a composite measure of Dubai's non-oil private sector economy, rose to 58.5 last month from 56.6 in January.
This reading was 8.5 basis points above the 50-mark, which separates growth from contraction.
The 1.9 basis points monthly increase in business activity growth was attributed to better operating conditions throughout the non-oil sector in Dubai.
More than a third, equivalent to 36%, of the businesses surveyed by S&P Global reported an uptick in their output levels compared to the previous survey period, indicating the strongest output growth in one-and-a-half years. Higher demand, robust market conditions, and increased project work boosted output growth.
New businesses grew at their quickest pace in all the vital non-oil sectors surveyed by S&P Global after slipping to their lowest growth levels in five months in January. Solid customer demand, decreased prices, and sales promotions contributed to more new order intakes in February.
Average output costs fell at the sharpest rate in eight months, with the wholesale and retail sectors witnessing the highest drop in charges. Conversely, the rate of rising input prices soared to a three-month high in February but remained moderate and weaker compared to the broader trend of rapidly increasing input costs.
With more orders and increased workloads, businesses hiked up their hiring activities. Employment opportunities in Dubai's private non-oil sector multiplied at their fastest pace since August 2015.
Stockpiles of inputs and semi-finished goods also increased at the quickest rate in three months in February.
Supplier performance was comparatively steady halfway through the first quarter due to a slight improvement in average lead times. However, supplier lead times decreased at their slowest pace in more than a year, weighed down by the effects of supply-chain disruptions due to the ongoing Red Sea crisis.
Crucial quote
"In fact, the reading signals that the Dubai non-oil sector is one of the fastest growing worldwide according to global PMI data," said a senior economist at S&P Global Market Intelligence.
"Output and new order volumes are proving especially robust, with companies reporting new clients, higher demand, and a still improving economy post-pandemic."
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