UAE business scales 18-month peak
dubai — Boosted by higher oil prices, business conditions in the UAE’s non-oil private sector continued to gain momentum in February as output and new orders accelerated, Emirates NBD survey revealed on Sunday.
“Strong demand conditions and a favourable economic environment encouraged companies to scale up purchasing activity and hire additional workers over the month. On the price front, average selling prices rose for the first time in almost one-and-a-half years as firms passed on to clients part of their additional cost burdens,” the bank’s survey said.
The seasonally adjusted Emirates NBD UAE Purchasing Managers’ Index, which covers manufacturing and services, rose to 56.0 in February from 55.3 in January. The 50-point level divides expansion from contraction.
“The rise in the UAE PMI to the highest level since September 2015 suggests that demand has strengthened, both domestically and abroad,” said Khatija Haque, head of Mena Research at Emirates NBD.
The survey, sponsored by Emirates NBD and produced by IHS Markit, found that sharp and accelerated expansion of new orders boosted output growth and helped sustain job creation in February as output prices rose for first time since October 2015.
“New business inflows rose sharply and at the fastest rate since September 2015, which survey participants linked to strong underlying demand and better economic conditions. With new export orders also expanding markedly over the month, companies raised output further. In fact, growth of business activity climbed to an 18-month peak,” said the survey report.
Consultancy firm Cooper Fitch, formerly Morgan McKinley, has predicted that a “slightly bullish outlook for the year ahead” is expected to have a positive effect on the Emirates’ job market and predicted that there would be a 4-6 per cent raise in pay.
In its Salary Guide for 2017, the recruitment firm said that it expects new jobs being made available following a better than expected finish to 2016 and a similar start to 2017.
The International Monetary Fund said in October that the UAE is projected to grow at 2.3 per cent in 2016 and 2.5 per cent in 2017.
A recent research the National Bank of Abu Dhabi said the UAE, which has been among the countries in the region that have done a better job of diversifying its economy and coming up with new streams of revenue, would lead economic growth in the Arabian Gulf in 2017 amid higher spending that will be spurred on by recovering oil prices.
The rise in the UAE PMI to the highest level since September 2015 suggests that demand has strengthened, both domestically and abroad Khatija Haque, head of Mena Research at Emirates NBD
Emirates NBD survey show that in February greater output requirements encouraged UAE firms to purchase more inputs and hire extra staff. “Buying levels increased to the greatest extent since last September, whereas the pace of job creation softened to the weakest in four months.”
The report noted that upturn in purchasing activity helped companies to build their input stocks in February, which rose sharply and at the second-quickest pace in one-and-half years.
According to the survey report, non-oil private sector companies in the UAE expect the favourable economic scenario to be sustained over the coming 12 months, with one-in-five companies forecasting output growth in the year ahead. In fact, the level of positive sentiment was at a five-month high in February. “Optimism reportedly reflected aggressive marketing campaigns, strong demand and new projects in the pipeline,” it said.
— issacjohn@khaleejtimes.com