Rise in UAE non-oil orders means more staff recruitment

Unsplash/Amy Hirschi

• Businesses scaling up headcounts thanks to more domestic orders
• ‘Rich’ pool of talent ‘rushing to the country’
• UAE’s 54.1 January PMI a year low, but still indicates growth

UAE non-oil businesses reported a three-month high in the growth of new domestic orders last month, leading to a continued rise in staff recruitment as companies move to clear their growing backlog.

However, this was offset by a “sustained reduction” in overseas orders, which fell at the quickest rate since June 2021, according to the monthly S&P Global UAE Purchasing Managers’ Index (PMI) for January.

This led to the January UAE PMI score hitting 54.1, its lowest point since January 2022 – although any score above 50 still indicates growth in market activity.

David Owen, senior economist at S&P Global Market Intelligence said that while weak global conditions “weighed on export demand”, the survey results showed “firms were somewhat optimistic about future output prospects”.

He added that the UAE “continued to signal a robust improvement in business conditions at non-oil companies”.

• Dubai’s $8.7trn plan hailed as ‘latest step in economic evolution’
• UAE warns against hiring ‘ghost’ Emiratis to meet quota targets
• Dubai SMEs will thrive in the digital economy

The rise in domestic non-oil orders and pressure to clear a growing backlog mean that businesses are scaling up their headcount to meet demand.

“Those in recruitment and executive search are reporting high volumes of new positions,” said Katy Holmes, general manager of the British Business Group Dubai and Northern Emirates.

“I am also hearing of frustration at the candidate end. It suggests to me that, with more people coming to Dubai as a result of a very strong global perception of ‘Brand Dubai’, the pool of talent is quite rich at the moment,” she said.

Aaron Portero, managing director of recruitment and HR consultancy Connect Group, forecast that the number of visa applications his firm will process this year will rise at least 25 to 30 percent. 

“The UAE job market has made a strong comeback post-pandemic with the help of new government initiatives and measures,” Portero said.

“With expats rushing to the country on the lookout for a job, we believe that the UAE job market will continue to see exponential growth.”

While inflationary pressures and business costs rising at the fastest rate for four years in 2022, these pressures eased in January and input costs were described as “broadly stable”.

With costs levelling out, businesses have been using the opportunity to cut prices, the S&P report said. “The modest rate of discounting quickened slightly from December and was the fastest for five months, with firms often choosing to offer price promotions in a bid to attract sales.”

Wayne Merrick, managing director of Dubai headquartered CBD Corporate Services, a firm which helps companies set up operations in the UAE, Saudi Arabia, Qatar and Oman, said that, despite the global headwinds, business conditions in the emirates “remains robust”.

“We observe a growing trend of company establishments in a variety of sectors, including healthcare, food and beverages, retail and technology. These sectors have experienced a marked rise in both employment and consumer spending over the past year,” he said.

Looking ahead, the UAE PMI showed that non-oil companies have a subdued, but still positive, outlook for 2023.

PRO Partner Group, a Dubai-based firm that helps with company setups in the region, said it was seeing a healthy flow of new businesses coming to the UAE.

“We ended up about 23 percent up year-on-year,” its CEO Nazar Musa said of activity last year, and he is predicting similar growth for 2023.

“Over half of new companies setting up in the Gulf came from the UK, US and France, said Musa, followed by Germany, Japan, Singapore and South Africa. He added there was also a small but growing number coming from South America.