The Purchasing Manager's Index (PMI) for October showed that the non-oil private sector economy continued to indicate a marked improvement in business conditions in the final quarter of 2014, 'Gulf News' reported yesterday.
The PMI, compiled by HSBC and Markit Economics, is a composite indicator of UAE's non-oil economy based on data compiled from purchasing executives in approximately 400 private sector companies in the UAE.
The survey's headline figure remained well above the neutral threshold of 50 in November, posting 58, but was down from October's record 61.2.
"The PMI is showing a little softness, suggesting weaker oil prices and poor global demand are starting to weigh. But the score is down only from its very high base and remains firmly in expansionary territory. We remain upbeat on near term growth prospects in both Dubai and Abu Dhabi," said Simon Williams, Chief Economist for Middle East & North Africa at HSBC.
November saw the level of output in UAE's non-oil private sector economy increase, in line with the trend since February 2010. A number of companies commented on stronger demand and an associated rise in the number of new projects being started. The rate of growth eased from October's survey-record high to the slowest in three months, but nevertheless remained sharp overall.
A similar trend was evident for new business. Inflows of new work increased at a slower rate than October's record, but one that remained well in excess of the long-run survey average. New export orders rose at a faster rate during the month, with growth rebounding from October's nine-month low.
Non-oil private sector firms in the UAE continued to boost capacity to accommodate higher workloads in November. Purchasing and employment both rose, albeit at slower rates than the record highs posted in October. Stocks of purchases increased on average for the thirty-first consecutive month although, as with purchasing, the rate of growth eased from October's record.
Employment continued to rise in November but at a slower pace than October. Producer price pressures also eased, with the input price index falling to 52.3 last month, the lowest reading since June 2013. This was due to weaker growth in purchase costs as well as staff costs. Consequently output price growth also slowed. "The latest PMI data continues to reflect strong fundamentals in the non-oil sectors of the economy, notwithstanding the recent decline in oil prices," said Khatija Haque Head of MENA Research at Emirates NBD.
Inflationary pressures moderated in November. Overall input prices rose at the weakest rate since June 2013, having risen in October at the strongest rate since May 2012. Purchase price inflation hit a 22-month low in the latest period, while inflation of wages and salaries eased to the weakest since August. Meanwhile, average prices charged by non-oil private sector companies for goods and services rose for the second month running, albeit at a weaker rate.