UAE non-oil private sector economy accelerates in Q2

Dubai / Emirates Business

The non-oil private sector economy in UAE accelerated in the second quarter of the year, according to Emirates NBD Purchasing Managers’ Index (PMI) survey for June.
The headline seasonally adjusted index — a composite indicator designed to give an accurate overview of operating conditions in the non-oil private sector economy — posted 57.7 in June, down from 59.4 in May but still signalling a marked monthly improvement in business conditions in the UAE’s non-oil private sector.
Commenting on the UAE PMI survey, Khatija Haque, Head of Mena Research at Emirates NBD, said: “The recent PMI surveys indicate that growth in the UAE’s private sector has accelerated in Q2 2019. Indeed the average PMI reading for the second quarter was the highest since Q4 2014. While firms have reported growth in output and new orders, this has come on the back of further price discounting. As a result, there has been no real boost to hiring as businesses remain focussed on keeping costs down.”
June data pointed to a sharp expansion of business activity, and one that was only slightly weaker than May’s survey record. Marketing activities were often reported as being behind the increase in overall activity, while economic conditions were also signalled as having improved.
A similar picture was seen with regards to new orders, with growth remaining substantial despite softening from the previous month. A number of panellists reported that competitive pricing had enabled them to secure sales, and this was reflected in a ninth consecutive monthly decrease in output prices.
Purchasing activity grew at a record pace for the second month running as companies responded to rising new orders. Stocks of purchases
also increased, albeit at a reduced pace that was the softest since February.
Companies were able to offer discounts thanks to a lack of cost inflationary pressure. Overall input prices rose only marginally in June. Purchase costs increased slightly, while wages and salaries were broadly unchanged.
The recent trend of only marginal changes in workforce numbers continued in June, with almost all respondents seeing no change in employment during the month.
As has been the case throughout the past two-and-
a-half years, backlogs of work increased amid reports of delays in receiving payments from customers.
Despite improving demand for inputs, suppliers’ delivery times continued to shorten markedly. Panellists indicated that vendors had speeded up deliveries in line with requests.