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Dubai / Emirates Business
Following May’s weakest improvement in six months, the upward growth trajectory of the non-oil private sector gained steam in June. The latest improvement was supported by sharper rises in both new orders and output. The ongoing upturns in output and new order book volumes encouraged companies to engage in input buying, leading to further increases in inventories.
Meanwhile, problems existed elsewhere as employment stagnated. New export orders fell for the first time in seven months as demand from international markets reduced. Business confidence towards the 12-month outlook eased to the second-lowest in the survey history. Following a decline in the prior month, there was a renewed increase in input costs. In spite of increased cost pressures, firms continued to offer discounts amid reports of intense 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.
Commenting on the UAE PMI® survey, Khatija Haque, Head of MENA Research at Emirates NBD, said: “The rise in output and new orders in June is encouraging, although we note that firms continued to reduce selling prices on average in order to support demand and order growth. The survey also highlights the lack of employment growth despite strong the strong increase in new work last month. Overall however, the PMI data for H1 2017 supports our view that the non-oil sectors have grown at a faster pace relative to H1 2016.â€
The headline seasonally adjusted Emirates NBD UAE Purchasing Managers’ Index™ (PMI®) – a composite indicator designed to give an accurate overview of operating conditions in the non-oil private sector economy – rose from May’s six-month low of 54.3 to 55.8 in June. Remaining comfortably above the crucial 50.0 threshold, the latest reading signalled a sharp improvement in the health of the private sector. Notably, the rate of growth was stronger than the long-run series average (54.5).