By Staff writer
Business conditions improved solidly, with the highlight being a marked and sharper rise in output - survey
The UAE’s non-oil private sector expansion strengthened in November, having eased to a two-and-a-half year low during October, according to a new survey.
Business conditions improved solidly, with the highlight being a marked and sharper rise in output. New business and employment also increased, although growth in the former was the weakest since April 2012.
The survey, sponsored by Emirates NBD and produced by Markit, showed that companies saw their pricing power diminish in November. Input costs rose further, but competitive pressures meant that charges fell regardless.
At 54.5, the headline Emirates NBD UAE Purchasing Managers’ Index (PMI) rose from October’s recent low (54.0). That said, the rate of growth remained much slower than that seen earlier this year and throughout 2014.
Non-oil private sector employment in the UAE continued to rise in November, extending the current sequence of hiring to 47 months.
The rate of job creation was the quickest since July, with firms reportedly taking on extra staff in preparation for the start-up of new projects.
Khatija Haque, head of MENA Research at Emirates NBD, said: “While the PMI data points to slower non-oil growth in the UAE this year relative to 2014, it is important to recognize that the non-oil economy is still expanding at a solid rate despite the sustained weakness in oil prices, tighter liquidity conditions and increased uncertainty about government spending in the region as we head into 2016.
"The rebound in the November PMI, and particularly the strength of output and new order growth, is encouraging.”
Underlying data indicated that higher output was a key driver of the overall expansion. Activity rose more quickly in November, having previously increased at the slowest rate in two years during October.
Although remaining marked, growth of new work failed to accelerate in November, dropping slightly to a 43-month low.