UAE non-oil firms raise prices at record pace in October, PMI shows

Dubai, November 4 - The United Arab Emirates' non-oil private sector thrived in October, with new orders surging and businesses passing on rapidly increasing costs, according to a business survey released on Wednesday. The seasonally adjusted S&P Global UAE Purchasing Managers' Index (PMI) dipped to 54.8 from 55.3 in September, yet remained well above the 50 threshold separating growth from contraction.

Output prices across the UAE non-oil private sector surged to their highest rate ever in October, as input cost inflation accelerated to its steepest level since June 2022, stated David Owen, S&P Global Market Intelligence's principal economist. Output growth remained robust, only slightly dipping from September's seven-month high.

Firms highlighted advancements in construction, retail, tourism, and manufacturing, though some attributed this to regional conflict, competition, and reduced discretionary spending. Demand amplified as new orders rose more swiftly than in September, with companies securing fresh clients and retaining existing ones. Export work spiked at the fastest pace in two years.

However, selling charges climbed at the swiftest rate since the survey's inception in August 2009, while input cost inflation peaked since June 2022, chiefly due to elevated prices for raw materials, fuel, energy, and freight. Employment fell marginally, marking the third decline in five months, as some firms downsized to contain costs.

This resulted in backlogs swelling again, though the rate of accumulation was the weakest in three months.