ABU DHABI, Feb 4 (Reuters) – The United Arab Emirates’ non-oil private sector experienced the fastest growth in new business in nearly two years in January, driven by a steep increase in new orders, a survey showed on Wednesday.
The seasonally adjusted S&P Global UAE Purchasing Managers’ Index rose to 54.9 in January from 54.2 in December, marking the highest level in 11 months. A reading above 50 indicates growth in activity, while below 50 points to a contraction.
Strong demand was highlighted by the sharp acceleration in new orders with the subindex rising to a reading of 60.0 in January from 57.2 in December, the fastest pace in 22 months.
“UAE’s non-oil economy started the year on a solid footing, as new orders increased steeply, prompting firms to lift output and sharply expand their purchases,” said David Owen, senior economist at S&P Global Market Intelligence.
Despite the accelerated sales growth, firms tightened their price margins due to competitive pressures, resulting in only a marginal increase in average selling prices. Input prices, on the other hand, rose the fastest in one-and-a-half years, on higher costs for raw materials and wages.
“Cost inflation across the sector climbed to an 18-month high, with firms facing higher charges on a range of materials,” Owen said.
Business expectations reached a 15-month high in January, with firms optimistic about future demand conditions and expansion efforts.
In Dubai, the country’s business and tourism hub, headline PMI rose to 55.9 in January from 54.3 the previous month, as new business growth hit a 22-month high, prompting faster employment growth and stockpiling efforts.
(Reporting by Reuters; Editing by Joe Bavier)
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