UAE: PMI improves in February despite supply chain challenges
The S&P Global United Arab Emirates Purchasing Managers’ Index (PMI) rose to 57.1 in February from 56.6 in January. As a result, the index moved further above the 50.0 no-change threshold and signaled a faster improvement in non-oil private sector operating conditions compared to the previous month. February’s upturn was primarily fueled by an increase in new orders, reflecting robust market demand and client activity. Firms managed to secure more business, leading to the sharpest rise in output levels in nearly five years. That said, disruptions to shipping, particularly in the Red Sea, began to impact local supply chains, resulting in the slowest improvement in vendor performance in seven months and a sharp increase in backlogged work. On the pricing front, firms faced rising input costs for the second consecutive month, driven by higher material prices and wages. However, in an effort to remain competitive, companies resorted to the most substantial price cuts seen since September 2020. Lastly, business sentiment also improved, reaching a four-month high.