Businesses in the UAE returned to a growth increase last month following a minor slowdown in January, reporting "uplifts" in activity and sales.

This is according to the latest PMI figures from S&P Global.

"Firms again secured greater volumes of new orders as market demand and client activity remained on upward paths," the S&P Global report states.

Subsequently, this led to the "sharpest rise" in output levels since mid-2019, despite there being "further signs that competitive pressures remained present."

However, one key issue faced by businesses was the disruption to shipping line activity in the Red Sea, impacting local supply chains, Gulf News reports: "Vendor performance improved to the least extent for seven months, while volumes of backlogged work rose at the sharpest rate for almost four years," the report goes on to say.

"Concurrently, input prices rose solidly for the second month in a row, though this did not discourage firms from offering price cuts in an effort to beat competitors – in fact, charge discounting was the greatest seen since September 2020."

Senior Economist at S&P Global Market, David Owen said of the latest figures: "Capacity pressures were apparent, with backlogs of work rising at their fastest pace in nearly 4 years, as Red Sea shipping disruption fed through into transport delays.

"Overall supply chain performance improved at the weakest rate since last July, but nonetheless still improved, suggesting that the impact on vendors is so far limited."

In addition, the Purchasing Managers Index reading for February stood at 57.1, a rise from January's 56.6, surpassing the 50-mark that separates growth from contraction.

"One of the PMI's largest components - the 'Output Index' - rose to its highest level since June 2019, pointing to a rapid expansion of business activity as firms look to take full advantage of strong market growth and maintain a competitive edge," the report continues.