UAE – Mubasher: The UAE’s non-oil private sector witnessed the sharpest improvement in business conditions since December 2017 during April, according to a report compiled by IHS Markit for Emirates NBD PJSC.
The headline seasonally adjusted Emirates NBD UAE Purchasing Managers’ Index (PMI) increased to 57.6 in April, compared to 55.7 in March, marking the second monthly growth in a row. A reading above 50 indicates expansion, while a reading below that signals contraction.
“The improvement in the volume of activity and new order growth last month is encouraging. However, with firms still competing on price, there is still a reluctance to boost hiring and we haven’t seen a meaningful improvement in job growth,” Khatija Haque, head of MENA Research at Emirates NBD, said.
Haque noted that household consumption is likely to remain constrained in the absence of job and/or wage growth.
Non-oil companies operating in the GCC nation’s private sector generated new order growth, with the pace of expansion at a 16-month high.
“External demand also picked up markedly as new work from Saudi Arabia and Oman, in particular, pushed the rate of growth in new export orders to a near four-year high,” the report highlighted.
Both higher new orders and a number of ongoing projects led to a sustainable increase in April business activity, the fastest since January 2015, the report found.
“Companies were able to reduce charges thanks to a relative lack of cost inflationary pressures. Both purchase prices and staff costs rose only marginally in April,” it added.
Staffing levels were raised only slightly again at the start of the second quarter in a bid to limit cost inflation in the UAE.
Business confidence of the UAE non-oil private sector businesses recorded a seven-year high in April, as forecasts of higher new orders supported optimism in the 12-month outlook for activity.
