Growth in the UAE non-oil private sector climbed to its fastest pace since February 2015, boosted by new orders and output, according to Emirates NBD.
The bank’s latest UAE Purchasing Managers’ Index (PMI) – a composite indicator designed to give an overview of operating conditions in the non-oil private sector economy – climbed to a 30-month high of 57.3 in August from 56.0 in July.
The growth rate was bolstered by sharp expansions in new orders and output, according to Emirates NBD. For example, new export orders rose for the first time in three months – even if the rate was marginal – with other GCC countries being mentioned as key sources of international demand.
An ongoing upturn in new business created new jobs across the non-oil private sector, while output requirements prompted firms to engage in purchasing activity, which contributed to a record rise in inventories.
Firms surveyed linked new client wins to new projects, enhanced marketing initiatives and good quality products, and they also cited favourable economic conditions, the bank added.
Khatija Haque, head of MENA research at Emirates NBD, said: “The August PMI survey shows a strong expansion in the non-oil private sector, underpinned by sharply higher output, new orders and inventories.
“Firms have indicated that new projects and competitive pricing are supporting demand and activity in the non-oil sector.
“This is in line with our view that investment ahead of Expo 2020 will be the key driver of the UAE’s non-oil growth over the next few years.”
Firms did continue to face upward cost pressures, mainly emanating from higher purchasing costs, Emirates NBD added.
However, output charges stabilised during August as firms were reportedly unable to pass on higher cost burdens amid intensive competition.
The survey, sponsored by Emirates NBD and produced by IHS Markit, contains original data collected from a monthly survey of business conditions in the UAE non-oil private sector.For all the latest business news from the UAE and Gulf countries, follow us on Twitter and Linkedin, like us on Facebook and subscribe to our YouTube page, which is updated daily.
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