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Activity in the UAE’s non-oil private sector saw its fastest monthly rate of expansion in 18 months in March,according to S&P Global’s UAE purchasing managers’ index (PMI)(pdf). The PMI reading for March came in at 55.9, rising 1.6 points from February. All five sub-components of the weighted-average index — new orders, output, employment, suppliers’ delivery times, and stocks of purchases — saw positive growth m-o-m. The latest PMI score places the index at a five-month high.
REMEMBER – Anything above the PMI’s all-important 50 mark cut-off indicates that the non-oil private sector is growing, while anything below that indicates contraction.
Buoyant numbers for March largely came on the back of strong demand driving new business orders, according to the report. Businesses scrambled to increase their capacity to meet strengthening demand, which came on the back of increased tourism and an upturn in domestic sales boosting the index. Despite increased tourism, domestic sales were the strongest driver for increased demand. Exports were broadly stable after a three-month lull.
Firms went on a hiring and purchasing spree to increase their capacity and meet new orders,with employment levels rising at their fastest rate in almost seven years, according to the report. As a result, employment was the component of the index where the UAE performed best.
Businesses beefed up their stocks and inventories so as not to be outpaced by soaring demand, increasing stocks at their fastest rate in five years. Firms also saw the fastest rise in stockpiles of raw materials and semi-finished items in five years, according to the report.
Outlook for the future stood at a five-month high,indicating that the majority of the panelists surveyed as part of the PMI report were confident that the non-oil private sector will continue to grow and generate new business over the coming 12 months.
On the downside: Purchasing activity slowed compared with February, and firms experienced a slower improvement in delivery times.
ICYMI- PMI figures told a mixed story elsewhere in the region: Saudi Arabia and Qatar saw their non-oil private sectors boom on the back of higher demand and exports in KSA and a softening of inflationary pressures in Qatar. Meanwhile, activity in Egypt’s non-oil private sector continued to decline as output and new orders took fresh hits.
