UAE: PMI declines in November from October's record high on lower oil prices

December 5, 2014

The HSBC Purchasing Managers’ Index (PMI) fell to 58.3 in November from 61.2 in October, which had represented the highest level on record. Despite the monthly drop, the PMI remains firmly entrenched above the 50-threshold that separates expansion from contraction in the non-oil producing private sector.

November’s figure mainly reflected lower readings in four of the five main sub-categories, with suppliers’ delivery times recording the only improvement in the index. In turn, inflationary pressures moderated in November. HSBC analysts added that, “[t]he PMI is showing a little softness, suggesting weaker oil prices and poor global demand are starting to weigh. But the score is down only from its very high base and remains firmly in expansionary territory.”

FocusEconomics Consensus Forecast participants expect GDP to expand 4.2% in 2014, which is down 0.1 percentage points over last month’s projection. For 2015, the panel sees the economy increasing 4.2%, which is also down 0.1 percentage points from last month’s estimate.

Author: Ricard Torné, Lead Economist

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UAE PMI November 2014

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

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