Dubai – Decypha: UAE’s non-oil private sector has recorded in the first quarter of 2017 (Q1-17) the highest average (55.8) in a year and a half, fueled by high production rates, new orders and rise in inventory levels, according to a recent report by Emirates NBD
The non-oil Purchasing Managers Index (PMI) has inched up to 56.2 points in March, up from 56.0 points in February.
Measuring the confidence of purchasing managers in the economy through monitoring the market, the business conditions were reported to have improved in March.
The growing market demand and business activity, as well as the presence of new projects, have pushed the UAE’s rate of expansion to a 25-month high level, according to the index.
New export orders, high volume of construction activity and products have also rose last month.
As a result of that, the accumulation of inventories have scaled up driven by increasing buying levels and output requirements as well.
“Firms faced increased cost pressures amid a general rise in market prices due to higher demand for raw materials,” the index said, adding that the production input inflation has jumped in March.
There has been a disagreement on methods of reacting to the input cost increase as some of them translated this to higher prices to clients, while others opted for discounts to maintain their market competition.
The PMI is an indicator of the economic health of the manufacturing sector, and it is based on five major main indicators: new orders, inventory levels, production, supplier deliveries, and the employment environment, as defined by Investopedia. The PMI is employed by companies to measure the health of the business environment, and better estimate the effectiveness of their decisions.
By Decypha Editorial Team
