United Arab Emirates PMI April 2016

United Arab Emirates

United Arab Emirates: PMI falls in April

May 3, 2016

The Emirates NDB Purchasing Managers’ Index (PMI) fell from 54.5 in March to 52.8 in April, the lowest figure in three months. Despite the decrease, the index is still above the 50-threshold that separates expansion from contraction in the non-oil producing private sector.

In April, slowing growth in output, new orders and input stocks all weakened the index. In particular, there was no increase in employment in the non-oil private sector, which ended a 51-month streak of increasing payrolls. According to Emirates NBD and Markit, the absence of growth in employment was the biggest factor behind the overall PMI decrease. Despite the soft employment figures, Emirates NBD analysts added that, “growth momentum in the UAE slowed a little in April after rebounding in March. External demand remains relatively subdued, and firms appear to be reluctant to increase hiring, despite solid growth in new orders and output last month. The PMI data year-to-date point to slower, but still positive, growth in the UAE’s non-oil sector, which is in line with our expectation for slower real GDP growth in 2016.”

FocusEconomics Consensus Forecast participants expect GDP to expand 2.5% in 2016, which is down 0.2 percentage points over last month’s projection. For 2017, the panel sees the economy increasing 2.9%.

Author:, Economist

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United Arab Emirates PMI Chart

UAE PMI April 2016

Note: Emirates NBD Purchasing Managers’ Index. Readings above 50 indicate an improvement in non-oil business conditions while readings below 50 indicate a deterioration.
Source: Emirates NBD and Markit.

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