United Arab Emirates: PMI moderates slightly in August after peaking in July
September 5, 2016
The Emirates NDB Purchasing Managers’ Index (PMI) dropped to 54.7 in August from July’s ten-month high of 55.3. The index remains comfortably above the 50-threshold that separates expansion from contraction in the non-oil producing private sector.
August’s result marked a moderation from July’s reading but was still above the 12-month average of 54.5. The reason behind August’s drop was the normalization in economic activity after July’s peak. While output, new work and employment continued to rise robustly and pointed to solid business conditions, their expansion was slower than in July. Input costs rose in August, although the intensity of competition limited the impact on the final products. Emirates NDB commented that, “output and employment appeared to be the main reasons for the slower rate of expansion last month, coming off the highs posted in July. However, output continues to expand at a relatively fast pace and new order growth is also robust.”
Author: Andrea Vetrugno, Economist