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.
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.