UAE’s non-oil private sector grows strongly

DUBAI / WAM

The health of the UAE’s non-oil private sector improved at the fastest rate in four months in May. Sharper growth in both output and new orders were the key drivers behind the latest expansion, according to the latest UAE PMI survey.
Furthermore, new export business reached a 30-month high alongside reports of stronger demand from neighbouring GCC countries. Responding to robust market conditions, new project wins and strong growth impetus, firms reported the highest degree of confidence towards the year ahead since this index began in early-2012.
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 strong PMI reading in May was partly due to a rebound in export orders – reflecting improved external demand conditions – as well as significant price discounting domestically. As a result, while the headline index shows strength in activity, profit margins remain under pressure.”
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 56.5 in May, from 55.1 in April. The figure was indicative of a sharp improvement in business conditions across the non-oil private sector, and one that was above the long-run average. The PMI has registered in growth territory continuously since September 2009.
A sharper expansion in output was recorded in the latest survey, matching that registered in January.
Companies commented on a strong level of demand from both domestic and external sources. Indeed, new export orders increased at the fastest pace since November 2015. Panel respondents frequently noted improving demand from neighbouring GCC countries.