UAE firms hike prices at record pace as costs surge, PMI shows

Dubai-based non-oil private sector firms experienced a surge in price hikes at an all-time rapid rate in October, as reported by the S&P Global UAE Purchasing Managers' Index (PMI) released on November 4. The index, released on November 4, revealed that despite demand holding strong, firms raised selling prices faster than ever before.

Despite the increase, the headline reading remained above the 50 mark, showcasing a certain level of resilience. The cause of this significant price surge was traced back to heightened costs associated with raw materials, fuel, energy, freight, maintenance, storage, and rent. The economy faces greater inflationary risks in Q4, particularly due to successive hikes in petrol and diesel prices, according to David Owen, principal economist at S&P Global Market Intelligence.

Dubai's PMI hit an eight-month high in October, indicating robust business conditions. This was accompanied by new business volumes growing at the fastest pace since February, with firms experiencing a record rise in selling prices. The cost pressures have accelerated to their fastest rate since June 2022, although stockpiling was less pronounced than in September.

The report also highlighted a record rise in service delivery, with firms citing strong demand forecasts and the hope for improved regional conditions as significant factors.