Arabian Gulf Business Insight - UAE sees strongest job growth since 2016

Employment in the UAE last month increased at the fastest rate in almost seven years as non-oil business activity continued its upward trajectory.

Buoyed by growth in new orders and capacity pressures, the seasonally adjusted S&P Global UAE Purchasing Managers’ Index (PMI) rose to 55.9 in March, from 54.3 in February, its highest since November.

A score above 50 indicates economic growth.

Dubai-based Ben McCabe, founding partner of executive search firm McCabe + Partners, told AGBI it had seen particular demand for environmental and climate expertise roles in both the private and public sector.

“Food and water scarcity are growing concerns. We’ve witnessed these industries, particularly agtech and foodtech see a spike in demand for talent and subsequent job opportunities being created,” he said.

The UAE has branded this year as the Year of Sustainability, and it is set to host the UN Cop28 climate summit in November and December.

According to the Gulf Employment Index from recruitment firm Cooper Fitch the UAE saw a year-on-year increase of 9 percent in new jobs in 2022.

Cooper Fitch managing partner Viachelsav Shakhov said it had a “busy Q1” with strong demand in areas including investment management, real estate, hospitality and tourism and consulting.

Between 2018 and 2022, the number of workers employed in the UAE business and finance sector grew by half a million.

At the same time, the number of construction workers declined by 300,000, according to Christian Kunz, chief strategy innovation and ventures officer at Dubai International Financial Centre.

“We’re seeing a shift towards the digital knowledge economy,” Kunz said at the inaugural annual general meeting of the Dubai Foundation Development Fund last month.

Robust growth forecasts

“The latest PMI reading of 55.9 in March reflected concerted efforts by non-oil companies to boost their capacity levels in the face of strengthening demand conditions,” said David Owen, senior economist at S&P Global Market Intelligence.

“Firms are still benefiting from relatively mild inflationary pressures, despite stronger market conditions and increased staffing demand driving a quicker rise in wages.”

Last month, the UAE Central Bank increased its 2024 economic growth forecast to 4.3 percent, up from the 3.9 percent increase predicted at the start of the year.

Vijay Valecha, chief investment officer, Century Financial, said: “Factors supporting the ongoing demand rise include robust growth forecasts by regional and international agencies, and a pick-up in crucial sectors, including real estate and tourism and subdued inflationary pressures.

“The increase in employment levels also supports overall wage gains, contributing to higher discretionary spending power.”