Emirates NBD release UAE PMI: March 2016
Emirates NBD release UAE PMI: March 2016
Growth of the UAE’s non-oil private sector gathered speed in February, having slowed in four of the previous five months, according to the latest note from Emirates NBD, shown below.
source markiteconomics.com
Thursday 03, March 2016 by Matthew Amlôt
The overall improvement in business conditions was helped by expansions in output, new orders and employment. All three variables rose slightly faster than in January, but the respective indexes remained below long-run trends. Meanwhile, with total cost pressures remaining muted, firms cut charges to the greatest extent since March 2010 as they competed to secure new clients.
The survey, sponsored by Emirates NBD and produced by Markit, contains original data collected from a monthly survey of business conditions in the UAE non-oil private sector.
Commenting on the Emirates NBD UAE PMITM, Khatija Haque, Head of MENA Research at Emirates NBD, said, “The improvement in the Emirates NBD UAE PMI last month is encouraging, particularly against a backdrop of low oil prices, global growth concerns and a strong USD. However, the rate of growth in the non-oil private sector remains much weaker than a year ago, when the headline PMI registered 58.1. We expect the environment over the coming weeks to remain challenging, with several global factors weighing on sentiment and activity.”
Key Findings
•Slowdown ends as PMI rises from near-four year low
•Rates of growth in output and new orders pick up slightly
•Tariffs drop at fastest pace in almost six years
The headline Emirates NBD UAE Purchasing Managers’ Index™ (PMI) – a composite indicator designed to give an accurate overview of operating conditions in the non-oil private sector economy – climbed to 53.1 in February, from 52.7 in January. With the previous reading being the lowest since March 2012, the latest figure was still below the series average (54.5). Nonetheless, it bucked the recent trend of slowing growth, and was consistent with a solid improvement in business conditions overall.
Both output and new orders rose more quickly in February, contributing to faster growth of the sector as a whole. The respective rates of expansion were marked but slower than on average over the survey’s history, having picked up only fractionally since the prior month. Higher new work was partly a result of lower tariffs, according to panellists. Meanwhile, data indicated that a rebound in growth of new export business had supported total new orders at UAE non-oil private sector firms.
Faster job creation was another factor behind the rise in the headline index during February. Employment rose at the quickest pace in three months, albeit only moderately overall. Anecdotal evidence linked hiring to rising workloads. The increase in new work was also sufficient to lead to further growth of outstanding business. Backlogs were accumulated for the second month running, following no change in December.
With regard to purchasing, the rate of expansion in input buying was broadly the same as in January, while the accumulation of pre-production inventories was unchanged. The start-up of new projects was reportedly behind higher purchasing activity, while stocks were raised at companies that expected future improvements in demand.
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