Business activity growth in the UAE’s non-oil private sector rose to a record high in October, helped by sharp gains in new orders and output, while the same in Saudi Arabia slowed over competitive pressures, a survey said.

The HSBC UAE Purchasing Managers' Index, which measures the performance of the manufacturing and services sectors, jumped to 61.2 in October, the highest level since the series began in August 2009, from 57.6 in September.

The adjusted index is far above the 50-point mark which separates growth from contraction in the survey of 400 private sector firms.

"The pick-up in price pressures captured in this month's data is of concern, but the dominant story is one of a UAE economy in full growth mode," said Simon Williams, chief economist for Mena at HSBC.

"The performance is all the more impressive given the decline in oil prices over the same period, and the continued downturn in emerging markets elsewhere."

UAE firms saw output growth accelerate to an all-time high, with the subindex coming in at 66.1, up from 63.2 in September. The new orders subindex rebounded to 69.9, also the highest on record. However, growth in new export orders slowed again to a nine-month low, with the subindex reading 57.4.

Employment creation across the UAE's non-oil private sector accelerated, raising the subindex to a record high of 56.1 in October from 52.6, with almost 17 per cent of firms recruiting new staff.

Output prices rebounded from negative territory with the index at 52.8 in October, the highest since June 2011 and up from 49.8 a month before. The subindex on input price inflation rose to 56.6, the fastest pace since May 2012.

Saudi non-oil business growth slows but still high

Growth in Saudi Arabia's non-oil private business sector slowed in October because of competitive pressures and signs of moderating demand, although activity remained robust overall, the survey said.

The PMI Index eased to a five-month low of 59.1 points last month from 61.8 points in September, which was the highest level in over three years. A reading above 50 means growth and below that level means contraction.

Output growth fell sharply, with the subindex dropping to 64.1 points from 69.5 as new orders tumbled to 65.4 points from 70.6.

However, employment growth accelerated at the fastest pace of since September 2012, with the subindex at 54.7 points. Over 12 per cent of companies said their employment rose, some were reacting to expectations for strong order growth in the future.

The hiring pushed staff cost inflation up to 54.5 points in October, its highest level since the survey was launched in August 2009, although overall input price inflation slowed slightly. Output price inflation climbed to 52.8 points, the highest since October 2012.

Backlogs of work rose rapidly, at a pace only slightly slower than September's record increase, which was evidence of capacity constraints in Saudi Arabia's private sector, the survey said. - Reuters