United Arab Emirates PMI May 2017

United Arab Emirates

United Arab Emirates: PMI dips in May but remains in expansionary territory

June 5, 2017

The Emirates NDB Purchasing Managers’ Index (PMI) dipped from 56.1 in April to 54.3 in May. However, the index remains comfortably above the 50-point threshold that separates expansion from contraction in the non-oil producing private sector.

May’s figure was underpinned by further increases in output and new orders, albeit at a slower rate than in April, signaling an improvement in economic conditions. However, external demand softened, with new export orders rising only marginally. In response to the still-positive economic panorama, firms took on more staff, although at a slower pace than in April. As a result of the extra manpower, capacity pressures remained contained, with backlogs of work rising only slightly. Following seven consecutive months of inflation, input costs dipped in May, with firms passing these lower costs on to consumers in the face of intense competition.

According to Khatija Haque, Head of MENA Research at Emirates NBD, “The decline in the headline PMI reading in May comes off very high readings from February through March. The data still shows a solid expansion in output and domestic demand in May, although external demand appears to have softened.”

FocusEconomics Consensus Forecast participants expect GDP to expand 2.3% in 2017, which is down 0.2 percentage points from last month’s projection. For 2018, the panel sees the economy growing 3.4%.

Author:, Economist

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United Arab Emirates PMI Chart

UAE PMI May 2017

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 IHS Markit.

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