DUBAI: The United Arab Emirates' non-oil private sector expanded at a faster pace in February as demand improved and output rose markedly, though growth was still slower than in the fourth quarter of 2021, a survey showed on Thursday.

The seasonally adjusted IHS Markit UAE Purchasing Managers' Index (PMI) rose to 54.8 in February from 54.1 January, which is above the series average, also at 54.1.

The index has been boosted by Dubai's hosting of the Expo world fair, which opened in October.

"The upsurge was widely linked to rising client demand, with businesses also pointing to growth in tourism as the Expo 2020 continued and countries loosened their travel measures," said David Owen, economist at survey compiler IHS Markit.

"While output expanded sharply in February, firms still reported a lack of capacity to deal with new orders, linked to weak hiring momentum and challenging global supply conditions."

The output subindex rose to 60.6 in February from 59.6 in January, accelerating further past the series average of 57.4. Employment decelerated to stay just a hair above the 50-mark that separates expansion from contraction.

Input costs rose for firms as raw material and transport prices rose, though the rate of inflation fell to its slowest since November.

"While global supply chains remained disrupted, business signalled that local vendors are increasing their capacity to manage these issues," the report said.

Business sentiment for the next year, measured in the future output sub-index, reflected its fastest expansion since October and second-strongest since mid-2020, though still well below the series average.