Economy UAE businesses see new orders grow at fastest rate since 2009 By Shane McGinley October 5, 2022 Creative Commons Many UAE retail and manufacturing businesses are seeing growth Firms keeping clear of economic storms in other regionsDirham pegged to US dollar which is strong against pound and euro The UAE’s non-oil private sector saw new orders grow in September at the fastest rate since records began 13 years ago, as costs and inflationary pressures eased. The monthly S&P Global UAE Purchasing Managers’ Index (PMI) dropped slightly to 56.1 in September from 56.7 in August, when it hit a 38-month high. A score of above 50 indicates growth, while less than 50 is a warning of contraction in trading conditions. UAE retail economy report shows spending up 16% this yearOnline shopping surges 32% in UAEAbu Dhabi sets up KEZAD Group to bolster its industrial ambitions Despite the slight dip in the index in September, David Owen, economist at S&P Global Market Intelligence, said it was “nonetheless indicative of another strong pace of improvement in the non-oil economy”. “At a time of heightened global recession risks, these findings suggest that domestic businesses are keeping well clear of economic storms in other regions, helped by above-trend rates of growth in output and new business as the country continues to recover from the pandemic,” he said. With business costs, especially those for energy, not rising at the same speed as earlier in the year, the index found that the rate of new order growth was “sharp” and the fastest since it began keeping records in August 2009. In previous monthly PMIs, businesses said they had opted not to increase prices, despite costs being at a more-than four-year high. “Subsequently, output charges were reduced for the fifth month in a row as businesses looked to further aid sales growth through competitive pricing,” the report said. The index found that a quarter of UAE companies have raised their output, but strong demand, existing backlogs and the rising number of new orders has meant that some businesses are seeing an “uptick in outstanding orders”. In order to meet the increased demand, companies also reported a further increase in employment levels. Dubai-based Pamela Opie, CEO and founder of Linen Obsession Textile Trading LLC, which supplies major department stores such as Debenhams, BHS and Jashanmal across the Gulf, said she was “starting to see the cost come down a little bit”. Opie said she has taken on additional warehouse space in order to cater to the increased demand in recent months. “We increased our space by 25 percent this year, due to new product categories we are distributing and increased retail space,” she said. Another benefit that has helped businesses in the UAE is the fact that the dirham is pegged to the US dollar, which has strengthened against other global currencies such as the British pound and the euro. “We’ve now pre-purchased all the currency to pay every order we’ve placed for the next three months, because we’re never going to get that deal again,” Opie said.