The seasonally adjusted IHS Markit Dubai Purchasing Managers' Index (PMI) rose from 52.6 in September to 54.6 in October, signalling a sharp improvement in operating conditions at non-oil private sector firms in Dubai.
Key to the uptick was a strengthening of new order growth, which improved for the first time in five months amid higher demand at a number of surveyed companies.
Sectoral data showed an acceleration among travel and tourism firms, while construction and wholesale and retail firms reported a weaker uplift in sales.
Panellists frequently mentioned that increased price competitiveness helped sales to rise in October.
Selling charges were reduced for the eighteenth month in a row, with the pace of decline the quickest since February 2016.
On the other hand, Dubai firms reported a fractional drop in their total input costs during the month.
With the amount of new work increasing, businesses expanded their output levels sharply in October.
That said, the rate of expansion was the second-weakest seen over the past year.
The upturn translated into greater hiring activity, marking the second successive rise in workforce numbers.
Moreover, the rate of job creation strengthened to a 21-month high, despite being marginal overall.
Meanwhile, Dubai non-oil firms built up their inventories at the start of the fourth quarter, as several panellists noted an anticipation of larger orders in the future.
The overall expansion was solid and the fastest since April.
However, increased purchasing activity placed greater pressure on suppliers, with lead times improving at the softest rate since the series began in January 2010.
Alongside higher demand, some respondents noted that a delay in payments to suppliers led to slower deliveries.
Finally, Dubai firms' projections for future output improved during October, after reaching a nine-month low in September.
Most firms remained optimistic of a boost to activity, citing expectations that domestic market conditions will stabilise and drive demand higher.
Anticipation for greater activity in the run-up to the Expo 2020 was also mentioned. ■