According to the S&P Global Market Intelligence research, non-oil business in the UAE improved at a "strong rate" at the start of Q4, resulting in an increase in UAE employment. New order growth was at the joint-highest rate in three months, and purchasing activity for companies is expanding at the strongest rate since before the pandemic, resulting in firms adding headcounts and raising UAE employment at the fastest rate since July 2016.
Non-oil private sector had continued to develop at a healthy rate
The seasonally adjusted S&P Global UAE Purchasing Managers' Index, an indicator designed to provide an accurate picture of operating conditions in the non-oil private sector economy, rose to 56.6 in October from 56.1 in September, and was only slightly lower than August's over-three-year high of 56.7.
This indicates that the non-oil private sector continued to develop at a healthy rate at the start of the fourth quarter. Any value over the neutral threshold of 50 suggests growth, whereas anything below that level indicates a declining market environment.
The recovery was driven by high increases in company activity and new orders, demonstrating that domestic enterprises were not only weathering the global economic storms, but also experiencing robust demand growth.
Firms saw the slowest increase in export sales since the beginning of the year
According to pricing statistics, UAE non-oil companies had minor inflationary pressures in October. Input costs rose only little, supported by lower fuel and transportation expenses as global oil prices fell recently. This allowed enterprises to decrease their production charges, even if the rate of discounting fell to its lowest level since July
According to the S&P Global report, new orders from abroad were one area of weakness in October. Firms saw the slowest increase in export sales since the beginning of the year amid global economic headwinds. With demand increasing sharply, firms faced additional strains on their operating capacity in October, leading to a sharp and accelerated increase in backlogs of work. This was partly linked to existing projects and pandemic-linked shipping delays.
Businesses responded in two ways:
• Firstly, UAE employment numbers were expanded at the fastest pace since July 2016, extending the sequence of growth to six months.
• Secondly, firms sharply increased their purchasing activity in a bid to build inventories for future work. Purchases rose to the greatest extent since mid-2019, while shorter lead times contributed to a solid accumulation of input stocks.
While rising input demand caused some price pressures in October, companies stated that cost reductions for commodities such as petroleum, steel, and transportation kept inflation at a manageable level.
UAE enterprises increased their workforce numbers at a rapid rate
The significant adjustments in October were on the capacity side, as enterprises increased their UAE workforce numbers at a quicker rate in response to mounting backlogs. Indeed, the rate of employment growth has been the fastest since July 2016. Firms also sought to stock up on inputs as they prepared work schedules to resolve backlogs, resulting in the fastest rise in purchasing activity in almost three years.
UAE visa change boosts employment hopes
The UAE's employment prospects have improved as a result of a visa modification.
Last month, new visa regulations for job seekers hoping to work in the UAE went into force. The new admission and residence system aims to recruit and retain global talents and skilled professionals. The UAE Jobseeker visa eligibility standards have been streamlined, and the categories of persons eligible to apply for the visa do not require a sponsor or a host.