UAE non-oil private sector growth hits 3-month high

DUBAI / WAM

November’s PMI signalled a strong upturn for the UAE’s non-oil private sector, and the sharpest pace of expansion since August, according to the latest UAE PMI survey.
“Steep growth in both output and new business contributed to the latest improvement in business conditions. Furthermore, firms responded to higher output requirements by increasing buying activity at the fastest pace in the survey’s history, whilst many respondents reported that they anticipate operating conditions to further improve in the next 12 months. In terms of inflation, average cost burdens rose at a solid pace, partly reflecting higher raw material prices,” the
report said.
Output continued to increase during November’s survey period, thereby extending the current sequence of growth that began in February 2010. Furthermore, the rate of expansion was the strongest registered in 33 months.
In response to rising output requirements, growth of buying activity reached a record high during November. The data reflected around 42% of respondents noting increasing quantities of purchases.
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.
Khatija Haque, Head of MENA Research at Emirates NBD, said, “The PMI reading for November confirms our view that the UAE’s non-oil sector will likely see strong growth in the fourth quarter of
this year, as both households and business will likely boost purchases before VAT comes into effect at
the start of next year. However, the continued softness in employment and lack of wage growth suggests that any boost to household consumption this quarter will likely prove temporary.”
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 to 57.0 in November, up from 55.9. The latest expansion was the strongest registered since August and above the series’ long-run average. The improvement partly reflected sharp growth in output and new orders in the non-oil private sector.