UAE PMI jumps to four-month high

A sharp increase in output and a more modest pick-up in new orders boosted United Arab Emirates’ (UAE) non-oil sector growth at the strongest pace in four months in March.

The latest Emirates NBD Purchasing Managers’ Index (PMI) rose to 54.5 from 53.1 in February.

In particular, output rose at the quickest rate since last September, helped by enhanced marketing efforts and incoming new projects.

New business also increased at a faster pace. However, the expansion was subdued relative to the long-run trend, with data highlighting weakness in international demand. New export orders fell for the first time in six months, albeit only marginally, the report said Tuesday.

“While the improvement in the Emirates NBD UAE PMI in March is encouraging, the average PMI for Q1 2016 signals a further slowdown in the non-oil private sector of the UAE at the start of this year,” said Khatija Haque, head of MENA research at Emirates NBD.

Nevertheless, the solid growth in output and new orders in the first quarter suggests that domestic demand is holding up well despite the headwinds of a strong USD and low oil prices, she added.

Meanwhile, employment in the UAE’s non-oil private sector increased further in March, extending the current sequence of job creation to 51 months.

On the price front, input costs rose only modestly, meaning that companies were able to reduce their tariffs amid greater competition.

The PMI is based on data compiled from a survey of companies in manufacturing, services, construction, and other non-oil sectors.

A level over 50 indicates an increase, while below 50 indicates contraction.

Write to Brinda Darasha at brinda.d@argaamplus.com