United Arab Emirates: PMI moderates slightly in September
October 5, 2016
The Emirates NDB Purchasing Managers’ Index (PMI) dropped to a three-month low of 54.1 in September from August’s 54.7. The index remains comfortably above the 50-threshold that separates expansion from contraction in the non-oil producing private sector.
September’s result marked a moderation from August’s reading and was broadly in line with the year-to-date average of 53.8. The reason behind September’s drop was a sharp deceleration in new order growth, which recorded its weakest result in over six years. On the contrary, the rate of growth in output and employment was broadly similar to that in August. Input costs decreased for the first time in a year and a half, and output charges also dropped. Emirates NDB commented that, “the sharp slowdown in new order growth last month appears to be due to weaker demand from external markets rather than soft domestic demand. Growth in output and purchasing activity remained strong. Overall, the PMI data points to a faster rate of expansion in the UAE’s non-oil private sector in Q3 2016, compared to Q2.”
Author: Andrea Vetrugno, Economist