United Arab Emirates: PMI climbs to new high in March
April 4, 2017
The Emirates NDB Purchasing Managers’ Index (PMI) rose from 56.0 in February to 56.2 in March, the highest figure in over one and a half years, showing that the non-oil sector is currently in rude health. The index has now been increasing uninterruptedly since November last year and remains comfortably above the 50-point threshold that separates expansion from contraction in the non-oil producing private sector.
March’s increase was driven by growth in output and new work amid an environment of strengthening demand. In response to healthy operating conditions and upbeat sentiment, businesses took on more workers and increased purchasing activity, leading to a resulting rise in stock levels. Input prices were higher in March, likely due to greater demand for raw materials, although most firms kept prices constant in the face of intense market competition. According to Tim Fox, head of Research and chief economist at Emirates NBD, “The latest PMI survey for the UAE points to encouraging growth in the non-oil economy through the first quarter of 2017. What was particularly notable in this report was the degree of optimism among local firms about the potential for further improvements in client demand, which was evident in a strong rise in purchasing activity.”
Author: Oliver Reynolds, Economist