Output growth slowed to weakest in six months despite rise in new orders, says Emirates NBD
UAE non-oil private sector growth eases in October but new business up
The UAE’s non-oil private sector economy continued to expand in October, though at a slower rate than the previous month due to a drop in output growth, according to the latest survey from Emirates NBD.
The seasonally adjusted Emirates NBD UAE Purchasing Managers’ Index – a composite indicator designed to give an accurate overview of operating conditions in the non-oil private sector economy – fell to 55 in October, from 55.3 in September.
A reading below 50 indicates that the non-oil private sector economy is declining; above 50, it is expanding. A reading of 50 signals no change. The latest expansion remained marked overall and above the historical average, Emirates NBD said. The survey is sponsored by Dubai's biggest lender, Emirates NBD and produced by IHS Market.
Non-oil private sector companies in the UAE reported another increase in new business and new order growth in October, possibly linked to higher promotional activity, the bank said. Levels of business confidence were at a record high.
However, output growth was the weakest in six months, the survey showed, and new orders from abroad grew at the slowest pace since March.
“The headline PMI has been broadly stable between 55 and 56 for the last four months, indicating growth in the UAE’s non-oil private sector at a similar rate to last year, when official GDP data showed the non-oil sector expanded 2.5 per cent,” said Khatija Haque, head of Mena research at Emirates NBD.
Employment was broadly flat in October after declining in the prior two months. This trend is at odds with output and new work growth, but increased margin pressures in October likely contributed to companies’ reluctance to boost hiring, Ms Haque said.