United Arab Emirates: PMI remains elevated in April
May 3, 2017
The Emirates NDB Purchasing Managers’ Index (PMI) was virtually unchanged at 56.1 in April from March’s 56.2, which had marked the highest figure in over one and a half years. The index remains comfortably above the 50-point threshold that separates expansion from contraction in the non-oil producing private sector, signaling buoyant activity.
April’s figure was underpinned by further strong increases in output, new orders and inventories, with the latter signaling firms’ optimism regarding future market conditions. Demand also continued to rise, in part thanks to a further expansion in exports. Despite healthy operating conditions, employment increased only moderately, with backlogs of work rising as a result. Although April saw a further uptick in input prices as a result of pricier raw materials, firms trimmed output prices in the face of fierce competition.
According to Tim Fox, head of Research and chief economist at Emirates NBD, “The PMI shows that while overall activity was firm going into the second quarter, companies are still facing significant challenges as job creation remains subdued and pricing power is limited.”
Author: Oliver Reynolds, Economist