UAE - Mubasher: The seasonally adjusted Purchasing Managers' Index (PMI) of the UAE increased to 57.4 in December 2023 from 57 last November, according to the latest S&P Global PMI data.

The PMI reading recorded its second-highest reading since June 2019, as economic trends in the UAE non-oil sector remained exceptionally strong at the end of 2023.

The data also highlighted a sharp upturn in new business intakes, which led to an expansion in output levels due to increased order book volumes and improved sales pipelines.

Meanwhile, the purchasing activity continued to surge as a result of positive demand trends, although some businesses opted to streamline stocks amid cost considerations.

After reaching a near six-year record, the rate of inventory growth slowed in December to a three-month low.

The latest survey elaborated that the inflation across the non-oil sector was partly helped by an alleviation of purchasing growth.

Purchase prices increased to the least extent since January, making the overall cost pressures down to a five-month low.

As for the output expectations in December, they were among the highest registered in the past four years.

David Owen, Senior Economist at S&P Global Market Intelligence, said: "Not only did businesses enjoy another substantial increase in output, but sentiment data suggested that they expect this growth to continue, with year-ahead expectations among the highest seen since prior to the COVID-19 pandemic.

"Supporting this optimism was a softening of price pressures, as purchasing costs rose to the least degree in almost a year,” Owen continued.

He indicated: “With wage pressures also remaining mild, firms were often willing to offer promotions and run down prices to remain competitive.”

“While the drop in charges – the quickest since July – may support additional sales growth in early 2024, the findings suggest that firms are still keeping profit margins low as markets become more crowded,” the official concluded.