Dubai: UAE businesses can look forward to closing out 2024 on a high – if the November trends are anything to go by.
Last month saw new business orders rise at the fastest pace since August, according to the latest PMI (Purchasing Managers Index) reading from S&P Global. But new hiring was still on the slower side, according to the report.
“Employment growth slipped to a 31-month low, while input purchases rose at the slowest pace since July 2023,” said David Owen, Senior Economist at S&P Global.
Obviously, there is a strong correlation between the higher costs that businesses are dealing with and their reluctance to take on more staff.
"Confidence in future business activity was relatively subdued - the secondlowest since early last year - and there were further mentions from panellists that markets are becoming crowded, curbing pricing power," said Owen.
Indeed, while businesses pulled in more orders, many of them had to do so by cutting down on their prices. This coupled with the higher input costs did weigh on profit margins.
November PMI
The UAE PMI score for November was 54.2, a slight increase on the 54.1 from October. (The Purchasing Managers Index score is built on factors such as the extent of capex spending by businesses, their order intakes, the relative cost of operations, etc. A score above 50 suggests private sector activity is in expansion mode.)
"The (November) index was firmly above the 50 no-change threshold, indicating a robust improvement in the health of the non-oil economy," says the S&P Global report. "That said, the rate of growth remained slower than those observed earlier in the year."
Keep staff levels constant
Employment rose 'fractionally' last month among UAE businesses and to the 'least extent for 31 months, with nearly all panellists (99%) reporting no change in their staffing'.
The UAE PMI data focuses extensively on three sectors - retail and wholesale, construction, and travel and hospitality. But some of the other sectors such as financial services had been recording employment gains in recent weeks and will close 2024 at much higher levels than in each of the last two years, according to industry sources.
