By Parag Deulgaonkar
External demand appears to have softened expansion, says Emirates NBD
The UAE’s non-oil private sector growth eased to a six-month low in May, though business conditions continued to improve, according to Emirates NBD.
The purchasing managers’ index – a composite indicator designed to give an accurate overview of operating conditions in the non-oil private sector economy – fell to 54.3 in May from 56.1 in April.
Though the index eased to a six-month low, the bank said it still signalled a “robust rate of expansion of the non-oil private sector”.
Khatija Haque, head of MENA research, Emirates NBD, said: “The decline in the headline PMI reading in May comes off very high readings from February through March. The data still shows a solid expansion in output and domestic demand in May, although external demand appears to have softened.”
Companies reported rates of expansion to ease in output and new orders, though remaining sharp. Following a seven-month inflation, the non-oil private sector faced lower input costs and continued to offer discounts to their clients for the second successive month.
New business inflows rose sharply in May, despite the rate of growth easing to a five-month low. Non-oil private sector continued to employ, but employment rose at the weakest rate in seven months.
According to the bank, over a fifth of the panel predicted growth in output in coming months as the degree of business confidence climbed to its highest level since September 2016.