UAE’s PMI hits a new record in August

PRIVATE SECTOR OUTPUT, NEW ORDERS POSTED STRONG GROWTH

The UAE’s non- oil private sector companies posted strong growth in August as new orders and output rose and the Purchasing Manager’s Index ( PMI) hit a record high. 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.

The up turn in the UAE’s nonoil sector gained momentum last month, with the seasonally adjusted PMI rising to a record high of 58.4, up from July’s 58. This surpassed the previous record seen in April.

The index data for lastmonth showed newbusiness expanded at the second- quickest pace in the series history to date and the rate of growth in new export business rose to a record high.

Last month saw a sharp increase in activity at the UAE’s non- oil producing private sector companies. Just under onequarter of survey respondents reported output growth, while only 3 per cent reported contraction.

“PMI data only strengthens our expectation that the economy will continue to perform well over the remainder of the year and into 2015. Risks may be starting to rise, but for now this is a boom in full flow,” said Simon Williams, Chief Economist for Middle East & North Africa at HSBC.

In line with a sharp expansion in output, new orders rose. Survey panellists linked new order growth to improved economic conditions. Meanwhile, client demand from international markets also strengthened, with the latest rise in new export orders the fastest since data collection began in August 2009.

Input costs increased further in August, with the rate of inflation the highest since May 2012.