However, for the first time in seven months, operational costs rose, forcing companies to tread cautiously about their growth outlook for the rest of the year.
David Owen, Senior Economist at S&P Global Market Intelligence emphasized that the (UAE private) sector is not without its challenges, as highlighted by a limited level of confidence in the year-ahead outlook.
Intense market competition has restrained price hikes, but rising cost pressures led to a slight increase in selling price inflation in February. Businesses remain focused on securing new work, leading to a buildup of backlogged orders.
The construction industry continues to be the most active sector, with developers racing to hit project milestones and boost off-plan property sales to investors.
Despite the surge in demand, job creation remained subdued, a trend that has been visible since mid-November. While some businesses expanded their workforce, most kept employment levels unchanged. If costs continue to rise, companies may further hold off on new hires.
Owen added that robust growth in business activity indicates that the pipeline of orders should eventually be addressed, factors such as weak job creation and administrative delays pose risks to this outlook.
Another major hurdle for businesses is the delay in securing payments from clients, a challenge that appears to be deep-rooted in the market.
(UAE) firms continue to report difficulties in securing payments from clients, an issue that may necessitate policy action to address, Owen warned.
