UAE: In December, the United Arab Emirates (UAE) witnessed a milestone in its economic landscape as non-oil business activity soared to its highest level in over four years. A key metric, the seasonally adjusted S&P Global purchasing managers’ index, rose significantly to 57.4, exceeding November’s 57 and marking the highest reading since mid-2019.
This surge firmly positioned the nation’s non-oil private sector well above the neutral 50 mark, indicating robust growth and a stark departure from contractionary trends.
The data released on Thursday highlighted a “robust improvement” in the health of the Emirates’ non-oil private sector, propelled by substantial upticks in both output and new orders. Moreover, the UAE’s non-oil sector displayed exceptionally robust economic trends, marked by the PMI achieving its second-best reading in four-and-a-half years. Future activity projections align with this optimism, ranking among the strongest recorded since early 2020.
David Owen, senior economist at S&P Global Market Intelligence, emphasized the resilience and positivity characterizing the UAE’s non-oil economy at the close of 2023. “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,” noted Owen. He highlighted not only a substantial increase in output but also optimistic sentiments among businesses, with expectations for growth persisting into the next year.
UAE’s Minister of Economy, Abdulla bin Touq, revealed a commendable 3.7% annual expansion in the first half of 2023, citing strong non-oil sector growth as a driving force. The sector experienced a 5.9% growth in the initial six months of the year.
Despite global economic challenges and uncertainties, the UAE’s economy rebounded strongly in 2022, registering a remarkable 7.9% growth – the most substantial in 11 years. The resurgence was fueled by higher oil prices and proactive government measures aimed at mitigating the impacts of the Covid-19 pandemic. Economic projections for 2023 indicate a continued expansion, with an estimated GDP growth of 3.6%, as affirmed by Minister bin Touq.
The UAE’s non-oil private sector is not only thriving but poised for sustained expansion in 2024. The positive economic indicators, strong projections, and commitment to diversification goals emphasize the resilience and adaptability of the UAE’s economy.
