UAE non-oil sector signals strong expansion in March

UAE non-oil sector signals strong expansion in March

Employment levels in non-oil businesses picked up, marking the tenth rise in as many months

Published: Tue 5 Apr 2022, 9:17 AM

The UAE’s non-oil sector signalled strong expansion in March, but one that was marred by intensifying inflationary pressures linked to rising commodity prices.

The headline seasonally adjusted IHS Markit UAE Purchasing Managers' Index (PMI) – a composite indicator designed to give an accurate overview of operating conditions in the non-oil private sector economy – posted 54.8 for the second month running in March. The reading was well above the 50.0 neutral mark to indicate a further sharp improvement in operating conditions.

The rate of new business growth at UAE non-oil firms was unchanged since February and remained close to the post-pandemic high seen in November 2021, according to S&P Global UAE PMI.

The new orders rose and panellists often linked this to a further uplift in client demand as markets recovered from Covid-19 lockdown measures. While domestic sales were the main driver of growth, there was also a modest expansion in the new export business.

The strong rise in demand fed through to a substantial increase in business activity during March, with nearly a quarter of surveyed firms signalling output growth.

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