Growth in the UAE’s non-oil private sector contracted slightly in September, according to the latest Emirates NBD purchasing managers index.
However, overall growth remained sharp with the average reading marking the strongest quarter for two years.
The Emirates NBD UAE Purchasing Managers’ Index – a composite indicator intended to give an accurate overview of operating conditions in the non-oil private sector economy – eased from the 30-month high of 57.3 recorded in August to 55.1 in September. Yet average overall growth for the quarter was 56.1, the strongest since the third quarter of 2015 (56.3).
The latest improvement in business conditions was driven by above-average expansions in both output and new orders, Emirates NBD said.
The bank said anecdotal evidence from the monthly survey of business conditions in the non-oil private sector compiled by IHS Markit, suggested strong underlying demand for goods and services, which helped drive output requirements. A sharp expansion in incoming new work was also signalled in September.
However, it noted that new business from abroad slipped back to contraction, suggesting that greater inflows of new work came from the domestic market instead of foreign sources.
On the price front, output charges fell, helped by softer cost pressures, while input price inflation softened to a four-month low.
Meanwhile, employment levels continued to rise for the 17th consecutive month in September. That said, job creation eased since August and was only slight overall.
Khatija Haque, head of MENA research at Emirates NBD, said: “Although the headline purchasing managers index eased slightly in September, the average reading for Q3 was the highest in two years, underpinned by strong growth in output and new work.
“The survey suggests that economic growth accelerated last quarter, and that domestic demand remains solid, despite relatively modest jobs growth.”
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