Dubai – Mubasher: The UAE’s non-oil private sector ended the year on a low note, with business conditions improving at the slowest rate in 40 months. Data showed that a key factor weighing on the sector as a whole was relatively muted growth of new work – the pace of expansion was the weakest since August 2011. Output, employment and input buying also rose more slowly, while charges decreased as firms competed to secure new clients Emirates NBD, according to UAE PMI™.
The survey, sponsored by Emirates NBD and produced by Markit, contains original data collected from a monthly survey of business conditions in the UAE non-oil private sector.
Commenting on the Emirates NBD UAE PMITM, Khatija Haque, Head of MENA Research at Emirates NBD, said, “The PMI data point to weaker domestic and external demand in Q4 2015 which is reflected in lower readings for new orders, employment, output and the backlogs of work. Indeed for 2015 as a whole, the average PMI was lower than for 2014, signalling slower – but positive – growth in the non-oil private sector. However, softer non-oil growth in the UAE last year is likely to have been partially offset by robust oil sector expansion, and we remain comfortable with our estimate of 4.0% real GDP growth in 2015 down from 4.6% in 2014.”
After adjusting for seasonality, the headline Emirates NBD UAE Purchasing Managers’ Index™ (PMI) – a composite indicator designed to give an accurate overview of operating conditions in the non-oil private sector economy – pointed to a loss of growth momentum in December. Falling from 54.5 in November to 53.3, the latest reading was the lowest since August 2012. Despite still signalling a solid improvement in business conditions, it meant that the fourth quarter was the weakest on average (53.9) since Q3 2012.
Underpinning the overall slowdown was a subdued expansion in new orders placed with UAE non-oil private sector companies. The latest rise was the least marked in nearly four-and-a-half years, albeit robust overall. New business from abroad followed a similar trend, with growth softening but remaining solid. Some panellists linked higher new work to improving market conditions both domestically and abroad, while others made reference to gains generated from marketing efforts.
