Taking a breather

The non-oil private sector in the UAE witnessed an easing of growth momentum in March, as new orders declined and foreign demand for goods and services remained sluggish.

dubai — The non-oil private sector in the UAE witnessed an easing of growth momentum in March, as new orders declined and foreign demand for goods and services remained sluggish.

Despite the 10-month low expansion, growth remained above the historical average, according to a survey, sponsored by Emirates NBD and produced by IHS Markit. Daniel Richards, Mena Economist at Emirates NBD, said while the UAE’s PMI score continues to moderate from the pre-VAT boost enjoyed at the end of 2017, it remains firmly in expansionary territory, and continued discounting by firms should help stimulate demand.

“Firms are more positive towards future output than they were last month, reflecting new orders that remain strong at 60.2.”

Emirates NBD UAE Purchasing Managers’ Index (PMI) eased to 54.8 in March, down from 55.1 in February. The figure indicated a marked expansion overall, and one that was fractionally above the longrun average. The Emirates NBD report said that output growth softened to a 23-month low during the latest survey. “The rate of expansion remained marked overall. Some clients linked the rise to new project wins.”

“Private sector firms reported easing job creation during March. Moreover, the rate of employment growth slipped to a 17-month low.

Firms are more positive towards future output than they were last month, reflecting new orders that remain strong at 60.2 Daniel Richards, Mena Economist, Emirates NBD

Incoming new business remained in sharp growth territory, posting above the long-run average in March. The rate of expansion was at a four-month low,” said the report. Price pressures eased further since the recent peak at the start of 2018. The rate of input cost inflation was marginal overall, and the weakest registered since May 2017. In line with easing cost pressures, businesses offered price discounting to stimulate client demand for the second month running. The rate of output charge deflation was modest overall in March.

Confidence in the non-oil private sector improved since February, and was strongly positive overall. New project wins alongside an expected global economic upturn underpinned positive sentiment in March, said the report. Most economists are of the view that the slower pace of growth would be short-term as the economy is poised to pick up steam on the back of increased spending and new projects in the run up to Expo 2020.

— issacjohn@khaleejtiems.com