Mubasher: The UAE has witnessed a strong performance for its non-oil private sector that was recorded at the start of Q3 and was largely maintained in August, according to a survey sponsored by Emirates NBD and produced by IHS Markit.
Business conditions across the UAE improved solidly, on the back of sharp rises in output and new work. The respective rates of expansion held broadly steady following July’s recent highs.
“The health of the sector was reflected by further growth of employment and purchasing activity, with the latter picking up to a nine-month high. Meanwhile, charges continued to fall, but only slightly as the impact of higher input costs nearly matched that of competitive pressures,” the survey added.
After having risen to a ten-month high of 55.3 in July, the headline seasonally adjusted Emirates NBD UAE Purchasing Managers’ Index™ (PMI) signalled another month of solid growth in August.
At 54.7, PMI was down yet still above the overall series average (54.5). Notably, the latest improvement in business conditions was stronger than those seen during the first half of the year, the survey added.
“The slight decline in the August PMI reading is not unexpected given the strong July number. Output and employment appeared to be the main reasons for the slower rate of expansion last month, coming off the highs posted in July. However, output continues to expand at a relatively fast pace and new order growth is also robust,” head of MENA Research at Emirates NBD Khatija Haque said.
“The PMI data is consistent with our view of slower but solid economic growth in the UAE in 2016,” she added.
PMI is a composite indicator designed to give an accurate overview of operating conditions in the non-oil private sector economy.
August data indicated to rising cost pressures in the UAE’s non-oil private sector. Both salaries and purchasing costs were up to the greatest extent in 22 months.
“Higher costs were barely felt by clients, however. The intensity of competition ensured that the impact of rising input prices was limited, as charges fell for the tenth straight month. That said, the pace of reduction was the slowest in the aforementioned period and only marginal overall,” according to the survey.