UAE's private sector marks fastest growth since June 2019

UAE's private sector marks fastest growth since June 2019

The UAE non-oil sector posted a marked increase in new business during October, driven by rising spending and tourism amid the opening of Expo 2020.

According to IHS Markit UAE Purchasing Managers' Index (PMI), economic indicators derived from monthly surveys of private sector companies, confidence regarding future activity also improved significantly.

The PMI surged to 55.7 in October, from 53.3 in September. This was the highest reading since June 2019.

An economist at IHS Markit, David Owen said that the Expo 2020 brought a highly welcome upsurge in growth across the non-oil private sector.

"The increases in both output and new business were sharp and the most marked since July 2019. In addition, the boost to sales led more companies to predict a rise in activity over the next 12 months, as optimism jumped to the highest level since the beginning of the pandemic,"

"The key test for the UAE economy will be whether this initial uplift in demand from the Expo can be sustained over the coming months. We also wait to see whether this will strengthen employment growth, as latest data showed a subdued rate of hiring despite growing pressure on business capacity."

According to panellists, Expo drove increased sales in several sectors as tourism strengthened and investment spending rose. In contrast to domestic sales, export orders ticked up only marginally at the start of the fourth quarter.

In addition to Expo, firms noted that the loosening of pandemic restrictions also helped to boost activity.

News Source: Khaleej Times

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