Dubai’s Non-Oil Sector Shows Strong Growth Amid Market Conditions

Dubai’s non-oil private sector witnessed accelerated activity in February, driven by a notable increase in new order volumes. 

According to the latest PMI survey data from S&P Global, this surge marks the sector’s most robust performance since May 2019.

Factors Driving Growth:

Businesses in Dubai benefited from favorable market conditions and responded positively to increased sales efforts. 

The recent exit of the UAE from the Financial Action Task Force (FATF) grey list has also contributed to an optimistic investor outlook, further bolstering growth prospects.

PMI Survey Highlights:

The S&P Global Dubai Purchasing Managers’ Index (PMI) surged to 58.5 in February, up from January’s 56.6, indicating a significant improvement in operating conditions across the non-oil economy. 

Key factors contributing to this uptick include changes in output, new orders, employment, suppliers’ delivery times, and stocks of purchased goods.

Insights from the Survey Report:

According to the survey report, companies responded to the favorable conditions by expanding staffing numbers at the fastest rate in eight-and-a-half years. Additionally, firms accumulated inventories rapidly despite some shipment delays.

Economist’s Perspective:

David Owen, senior economist at S&P Global Market Intelligence, emphasized the robust growth of the Dubai non-oil sector, noting that it is among the fastest-growing worldwide according to global PMI data. 

He highlighted strong output and new order volumes, attributing them to new clients, higher demand, and ongoing economic improvements post-pandemic.

Impact of FATF Grey List Removal:

Analysts believe Dubai’s investment landscape received a significant boost following the removal of the UAE from the FATF’s grey list. 

This development is expected to streamline foreign currency exchange processes, enhance economic diversification, and stimulate business growth in Dubai and other emirates.

Outlook and Growth Expectations:

The PMI survey indicates a positive outlook among Dubai non-oil companies, with around 19 percent of respondents expecting output growth in the next 12 months. 

This optimism and sustained favorable market conditions suggest further expansion for the non-oil sector throughout 2024.