New orders drive growth in #UAE non-oil business in December -PMI | Reuters

New orders drive growth in UAE non-oil business in December -PMI | Reuters

Non-oil business activity in the United Arab Emirates grew strongly in December with a jump in new orders supporting strong output, a survey showed on Thursday, boosting prospects for continued expansion in 2024.

The seasonally adjusted S&P Global UAE Purchasing Managers' Index rose to 57.4 in December from 57.0 in November, well above the 50.0 mark signalling growth in activity and the second highest reading in more than four years.

Overall output remained robust with the related subindex at 63.9 in December, unchanged from the previous month, amid a year-end surge in new business and a strong sales pipeline, according to the survey results.

The subindex for new orders jumped to 63.0 in December from November's 60.5 and remained well above the series average, but the rate of growth was driven largely by domestic demand as export order growth slowed to a five-month low.

"The UAE non-oil economy closed the year with another impressive expansion, confirming the strongest quarterly upturn since Q2 2019 and putting the sector in a favourable position for 2024," David Owen, senior economist at S&P Global, said.

"Not only did businesses enjoy another substantial increase in output, but sentiment data suggested that they expect this growth to continue, with year-ahead expectations among the highest seen since prior to the COVID-19 pandemic."

Business optimism for output activity over the next 12 months strengthened in December from the previous month with respondents citing new sales pipelines and enquiries, as well as improving market conditions, as reasons for confidence.