Emirates NBD’s latest tracker indicates sharp improvement in business conditions
The UAE’s non-oil private sector gained further momentum in March, with Emirates NBD’s latest Purchasing Managers’ Index rising to a 19-month high last month, the bank said.
The index – a composite indicator designed to give an accurate overview of operating conditions in the non-oil private sector economy – picked up to 56.2 in March, from 56.0 in February.
The reading was matched with a sharp improvement in business conditions, with the rate of business expansion accelerating to its sharpest level in 25 months.
As a result, the quarterly average for the first quarter of 2017 – 55.8 – was the strongest in 1.5 years, Emirates NBD said.
The overall expansion was driven by new projects, a further general improvement in economic conditions and increased market demand.
Businesses recorded sharper increases in output and new orders, as well as a record rise in stocks of purchases. Firms raised their payroll numbers slightly, while there was evidence of ongoing pressure on operating capacity, according to the report.
Prices data suggested that the UAE non-oil private sector faced intense market competition last month, as the vast majority of firms registered no change in output charges despite increased cost pressures.
However, despite companies ramping up recruitment efforts, the rate of job creation was only modest, the bank said. As a result, the rate of backlog accumulation edged up to a six-month high. Companies reported that higher demand had contributed to rising work outstanding.
The survey, produced by IHS Markit, contains original data collected from a monthly survey of business conditions in the UAE non-oil private sector.
Tim Fox, head of research and chief economist at Emirates NBD, said: “The latest PMI survey for the UAE points to encouraging growth in the non-oil economy through the first quarter of 2017.
“What was particularly notable in this report was the degree of optimism among local firms about the potential for further improvements in client demand, which was evident in a strong rise in purchasing activity.”
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