UAE PMI rebounds on new orders growth

The United Arab Emirates saw a faster pace of expansion in the non-oil private sector last month, pushing up the Emirates NBD Purchasing Managers’ Index (PMI) for the first time in four months.

The seasonally adjusted headline index reached 54.2 in November, compared to 53.3 in October.

The improvement was driven by stronger new orders growth and a light rise in employment, the bank said.

The new orders sub-index jumped to 56.4 in November, from 53.2 the previous month. “The improvement is notable as export orders continued to decline for the fifth month in a row, suggesting that it has been domestic demand that has strengthened,” the report said.

Firms surveyed attributed the faster order growth to “successful marketing initiatives, including price discounting” according to IHS Markit, which conducts the survey.

Output prices slipped slightly, marking the 13th straight month of lower average selling prices in the UAE. Input prices, however, rose at a faster pace driven by higher purchase costs.

Employment index rose marginally to 51.8 from 50.3 in October. November saw the fastest growth in jobs since July.

Purchasing activity and inventory increased at a faster rate in November, indicating that firms are optimistic about future demand, the bank said. Suppliers’ delivery times shortened and backlogs of work increased only modestly.

“Overall, the November PMI data bodes well as we head into year-end, which is typically a high season for retail, transport and hospitality sectors in the UAE,” the report said.

The average PMI reading for the year-to-date is 53.8, much lower than the 2015 average of 56.0, indicating that growth has slowed this year, it added.

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 Nadeshda Zareen at nadeshda.zareen@argaamplus.com