3 Nov 2021
EXPO Raised UAE Non-oil Private Sector Growth at the Fastest Pace - PMI
The Index Today
A survey showed on Wednesday that the United Arab Emirates' non-oil private sector expanded at the fastest pace since June 2019 in October, recording its 11th straight month of growth as the Expo world fair began in commercial hub Dubai.
The seasonally adjusted IHS Markit UAE Purchasing Managers' Index (PMI), leapt to 55.7 in October from 53.3 in September on the back of higher spending and tourism according to the Reuters report.
David Owen, economist at survey compiler IHS Markit said, "The Expo 2020 finally began in the UAE at the start of October and brought a highly welcome upsurge in growth across the non-oil private sector." Expo was delayed for a year due to the COVID-19 pandemic.
"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," Owen added.
Business capacity in the non-oil sector was under renewed pressure due to rising new orders, leading to a fourth consecutive month of growing backlogs of work, albeit expanding at a marginally softer pace than in September.
"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," Owen said.