The United Arab Emirates’ non-oil private sector expanded strongly in December, logging its 13th straight month of growth, a survey showed on Wednesday.
The seasonally adjusted IHS Markit UAE Purchasing Managers’ Index fell slightly to 55.6 in December from 55.9 in November, holding near 2-1/2-year highs.
The improvement in business conditions has been boosted by the UAE’s largest city Dubai hosting the Expo world fair, which began in October and ends in March.
It is a marked turnaround from last year, when the UAE’s PMI recorded just four months of weak expansion as the pandemic pummelled tourism, aviation and other key sectors of the economy.
“New work volumes rose sharply, supporting the fastest upturn in business activity for almost two-and-a-half years,” said David Owen, economist at survey compiler IHS Markit.
Output, which measures business activity, rose to 62.7 in December from 61.6 in November, its highest since July 2019.
New orders continued to rise in December, although the pace of increase eased to a three-month low. Businesses struggled to keep up with demand, leading the backlogs sub-index to its sixth consecutive monthly rise.
“The next few months may prove more challenging, however, depending on how the Omicron variant impacts worldwide travel and local restrictions. Businesses also face the prospect of higher inflation, after the latest data indicated the fastest rise in purchase costs for nine months due to an increase in energy and raw material prices,” Owen said.
The employment sub-index notched its seventh straight month of expansion in December.