KHALED AL KHAWALDEH (ABU DHABI)
The UAE’s non-oil sector continued to strengthen its position in March 2024, with strong demand leading to sustained increases in output, despite ongoing logistics issues, rising input costs and newfound capacity pressures.
“It’s been quite strong in the last few months. It was again the case in March. We’ve been seeing Purchasing Managers’ Index (PMI) readings at some of the highest levels since 2019,” Senior Economist at Standard and Poor (S&P) Global Market Intelligence, David Owen told Aletihad.
S&P’s PMI is compiled of survey results from purchasing executives, and measures new orders, output, employment, suppliers’ delivery times, and stocks of purchases on a 0-100 scale, with 50 being the no-change mark. In the latest update, the UAE non-oil specific index score declined slightly to 56.9 in March, down marginally from 57.1 in February, but remained solidly above no-change mark signalling a robust performance for the sector.
“There are strong pipelines for companies to work through in the future which is positive for the upcoming months. It means there’s a pent-up demand, which should help support activity growth in the future,” he said.
David said the non-oil sector in the UAE had shown resilience to interest risks as well as cuts in oil production, which he believed would continue into 2024.
“We forecast that the non-oil sector is looking likely to remain on track for 2024 but there’s a bit of traction in its growth trend expected due to higher interest rates globally filtered into the non-oil sector,” he said.
“We’re expecting that there is going to be a slight increase in oil output in Q2 of this year.”