UAE firms raise selling prices at fastest pace in survey's history
UAE non-oil companies raised their selling prices at the fastest rate in the survey's history in October, passing a sharp rise in operating costs on to customers while demand strengthened, the S&P Global UAE Purchasing Managers' Index showed.
The headline PMI came in at 54.8, down slightly from 55.3 in September but still well above the 50 mark that separates growth from contraction. Output prices climbed at their sharpest pace since the survey began in August 2009, with panellists linking the increases to spiralling costs and efforts to protect margins. Input price inflation quickened to its fastest since June 2022, driven by higher purchase costs across raw materials, fuel, energy, freight, maintenance, storage and rent.
David Owen, principal economist at S&P Global Market Intelligence, said the findings point to greater inflationary risk for the UAE economy in the fourth quarter. "The unprecedented rise reflected efforts to pass cost burdens on to customers, with firms feeling the impact of higher fuel prices and increased charges for critical materials," he said, adding that successive increases in petrol and diesel prices had heightened the risk.
Demand held up. New orders rose faster than in September, helped by new clients and repeat business, and new export work grew at its quickest rate in two years. Output growth eased only marginally from September's seven-month high, with firms citing construction, retail, tourism and manufacturing. Employment fell fractionally, the third decline in five months, as some companies cut headcount to control costs. Business optimism rose to its highest since January on robust demand forecasts and hopes that regional conditions will improve.
Dubai's PMI edged up to an eight-month high of 54.6 from 54.5, with new business volumes rising sharply and firms there also reporting a record increase in selling prices. Purchasing activity across the UAE rose at its sharpest pace in nine months, and vendor performance improved to the greatest extent since June as firms continued switching to local suppliers to offset disrupted maritime routes.
