The UAE’s main purchasing managers’ index, affiliated with S&P Global, rose in December 2024, for the third month in a row, from 54.2 points to 55.4 points, and was at its highest level in nine months. The reading, which was much higher than the neutral level (50.0 points), indicated a strong expansion, even stronger than before, in the non-oil-producing private sector, indicating an accelerating expansion in the private sector economy, as strong demand conditions stimulated the fastest increase. in new business in nine months, which also led to a sharper increase in production.
For the third month in a row, non-oil producing companies highlighted the decline in production prices in December, as reports indicated further efforts to reduce selling prices to customers and support sales growth, at a time when production input costs rose, despite the inflation rate slowing to Its lowest levels since last March.
The headline Purchasing Managers’ Index (PMI) for the UAE is a seasonally adjusted composite index prepared to provide an accurate overview of operating conditions in the non-oil private sector economy. The companies participating in the study emphasized the thriving market conditions at the end of last year, which helped them secure new customers and larger orders. She noted that the overall rise in new business was the steepest in nine months, despite a slight increase in sales to international dealers.
As a result, companies expanded their production at the largest rate since April 2024. According to qualitative reports, high demand, projects under implementation, reduced prices, and favorable weather conditions were supportive factors for business activity.
On the price front, the latest data brought encouraging news, as the pace of inflation in input prices slowed for the fourth time in five months and fell to below average. Although we observed increases in raw materials, shipping, food and technology costs, overall purchasing prices rose at the weakest pace since April 2024, and wage pressures also rose, but modestly.
At the same time, average prices for products and services fell for the third straight month in December, and the reductions were widely linked to strong competition and efforts to support growth. However, the decline in selling prices was the slowest during the current period.
Non-oil producing companies expressed their optimism about this year’s expectations during December.
Strong position for 2025
Senior economist at S&P Global Market Intelligence, David Owen, said: “The UAE witnessed its best expansion in non-oil-producing businesses in a period of nine months, during December 2024, as the latest data issued by the Purchasing Managers’ Index concluded another year of “Continuous growth has placed the sector in a strong position for the year 2025.”
He added: “The latest data indicated the slowest rise in the prices of total production inputs in nine months, and the growth in purchases accelerated to the highest level in 13 months, which may help increase inventory after the rate of increase was weak in the second half of 2024.”
Dubai records the strongest growth in operating conditions in 9 months
The Dubai Purchasing Managers’ Index rose from 53.9 points in November 2024 to 55.5 points in December, indicating the strongest growth in operating conditions in nine months. The reason behind this improvement was the rapid expansion in production and new orders, as companies commented on the increase in demand from Dealers, great activity in the markets, and in both cases, growth rates were stronger than those recorded at the UAE level.
In turn, high growth in new business encouraged a new, albeit moderate, increase in employment, and in turn, input stocks fell for the second month in a row. Production prices began to rise after cuts in October and November.
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