UAE: PMI stable in March
The S&P Global Purchasing Managers’ Index (PMI) came in at 54.8 in March, matching February’s reading. Consequently, the index remained above the 50.0 no-change threshold, signaling a continued improvement in business conditions from the previous month.
The stable reading came as growth of output and new orders remained at post-pandemic highs, amid a resurgence in demand and travel taking place during the Expo 2020—which ended on 31 March—and as the recent global wave of Omicron gradually subsides. Business optimism remained strong and supplier delivery times fell at the fastest rate seen since July 2020, suggesting an abatement of the recent global shipping crisis. Less positively, input inflation hit a more than three-year high due to the effect of the war in Ukraine on global commodity prices, contributing to weaker growth of inventories.
On the reading, IHS Markit’s David Owen commented:
“The uplift weighed somewhat on business pricing decisions. Whilst output charges continued to fall, they did so at the weakest pace for eight months. Given that the recovery in sales has been reportedly helped by price discounts since the second half of 2021, firms now face a difficult decision – whether to pass on higher costs and risk a drop-off in demand, or face a hit to their profit margins.”