Emirates NBD statistics show that business confidence deteriorated sharply since January
Growth in the UAE’s non-oil private sector economy eased in February, largely due to a slowdown in output growth and softer job creation, according to statistics from Emirates NBD’s seasonally adjusted Purchasing Managers’ Index (PMI).
The PMI statistics show that business conditions improved at the weakest pace since September 2016, with business confidence falling to a six-month low after falling sharply since the beginning of 2018.
According to the PMI, while output growth eased to a nine-month low, the rate of expansion remained sharp and was broadly in line with the series’ historical average.
Additionally, non-oil private sector firms reported an increase in new business, with the rate of growth having accelerated since January and slightly above the average seen over the course of 2017.
While new orders from abroad continued to increase for a third consecutive month and supported domestic demand, the rate of growth was slight overall.
The PMI found that job creation continued in the non-oil private sector for the 22nd consecutive month, the rate of growth eased to its slowest since June 2017 and was subdued when taken in comparison to historical data.
Input price inflation was found to have eased since the last survey, and, while solid, it fell below the long-run average. Output charges returned to decline in February, with anecdotal evidence suggesting that reduction in cost pressures allowed firms to reduce prices and stimulate client demand.
Lastly, business confidence was found to have deteriorated sharply since January, with a level of optimism “well below” the historical average.
“The February PMI survey shows a solid rate of growth in the UAE’s non-oil private sector, although it was slower than we’ve seen in recent months,” said , Khatija Haque, Head of MENA research at Emirates NBD. “The key components of the survey point to strong domestic demand but firms were notably more cautious than they were in January about the prospects for output growth over the coming 12 months.”