Business activity growth in the UAE’s non-oil private sector fell slightly in December from a record high in November but output hit a 32-month high, a purchasing managers’ survey showed on Monday.
The HSBC UAE Purchasing Managers’ Index, which measures the performance of both manufacturing and services, fell to 57.4 points last month from 58.1 points in the previous month.
The adjusted index remains above the 50-point mark which separates growth from contraction, the survey of 400 private sector firms showed.
December saw further steep increases in output and new orders, with growth in activity accelerating to a 32-month high.
Meanwhile, work-in-hand accumulated at the fastest pace in the series history and output charges rose for the first time since September.
Although the December reading for the UAE private sector was down slightly from November, it rounded off the best quarter in the series history.
Activity rose at the fastest pace since April 2011 during December, with companies commenting on increased order intakes, the survey said.
It added that new orders also rose solidly, with 41 percent of panel members indicating growth. The pace of expansion eased slightly from November’s record high, but was the second-quickest in the series history.
Survey respondents linked the latest rise to increased sales team efforts, good economic conditions and higher construction activity. Meanwhile, new export orders rose at the slowest pace in four survey periods.
Cost pressures persisted into December, with 12 percent of panel members reporting higher input prices. While purchase prices rose at the fastest pace in over a year, wage inflation was unchanged since November, they said.
In response to higher input costs, the UAE’s non-oil producing private sector firms raised their charges in December. The increase in selling prices followed two months of price reductions.
Staffing levels rose in December with the increase remaining above the long-run series average. Anecdotal evidence suggested that higher employment levels were driven by increased workloads.
The latest survey data signalled a further rise in buying activity at the UAE’s non-oil producing private sector firms, with the rate of expansion down only fractionally from November’s record high.
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