Abu Dhabi and Dubai stocks have gained more than 29% and 12%, respectively, this year following the end of a political rift with Qatar, improving business activities and analysts' expectations of property prices.
According to IHS Markit "manufacturers highlighted that strain on capacity and raw material shortages are expected to last through 2021." It noted that the supply crunch was raising production costs for manufacturers, who "made efforts to pass higher cost burdens on to clients."
The survey said its measure of new orders increased and that though factories tried to recruit more workers, the pace of hiring was the slowest in five months.
Despite a slow vaccine roll-out and a surge in reported coronavirus infections, optimism about the year ahead improved. The composite future output index rose to 67.9 from 67.0, its highest since February 2018.
"With COVID-19 restrictions expanded and lockdown measures re-introduced in many states, Indian manufacturers look set to experience a challenging month in April."
Some analysts also warned that lockdowns in Europe and supply constraints, such as chip shortages that are disrupting automobile production, could weigh on factory activity in countries like Taiwan and South Korea.
Even though prices for solar PV modules are higher than last year, along with long delivery times and rising freight costs, demand should grow in the second half of this year.
"In 2021, the strong growth is mostly coming from the top three markets - China, US and India," Edurne Zoco, executive director, clean energy technology at IHS Markit, told Reuters.
The coronavirus pandemic has accelerated their use of technologies such as cloud and AI, as more of customers have needed to access their services remotely, and employees have been working from home.
The data was in line with economists' forecasts, with a reading above 50 indicating growth in manufacturing, which accounts for 11.9% of the US economy.
The supply chain bottlenecks, which are widespread across the manufacturing sector as well as the services industry, have led to higher prices for inputs, including raw materials.