Business activity in the UAE’s non-oil private sector witnessed a strong end to the year owing to a sharp rise in new businesses and output coupled with a boost from Expo 2020 Dubai.

The purchasing managers’ index—a gauge that helps provide an insight into the operating conditions in the non-oil private sector economy—was at 55.6 in December 2021. This figure was only slightly lower than that of November 2021’s 55.9 (a 29-month high).

The reading above the neutral level of 50 on the purchasing managers’ index shows positive signs of expansion while a rating below 50 indicates a contraction.

The latest data by IHS Markit showed that the growth was mainly supported throughout the fourth quarter due to the easing of restrictions and the start of Expo 2020 Dubai. About 25% of the businesses that were surveyed also reported an increase in their output as compared to November 2020.

Even after the pandemic-induced slowdown, the UAE economy has made a strong recovery. The biggest lender in Dubai, Emirates NBD, estimated that the UAE’s non-oil sector witnessed a rise of 3.5% in 2021 and predicted a growth of 4% in 2022.

Emirates NBD has noted that the UAE’s high vaccination rate and relatively younger population have enabled it to withstand the current wave of infections without the requirement to reimpose strict measures.

Moreover, they also said that “Even with the lower December PMI reading, the average PMI for Q4 [the fourth quarter of] 2021 was the highest since Q2 [the second quarter of] 2019, which supports our view that the UAE economy likely saw faster GDP growth in the final quarter of last year.”

The overall economic output is forecast to expand by 4.6% in 2022, according to the World Bank. This figure is higher than the UAE Central Bank’s second-quarter review of 4.2%.