Dubai - Mubasher: Emirates NBD UAE Purchasing Managers’ Index (PMI), an indicator of operating conditions in the non-oil private sector economy, on Monday posted 56.8 points in January, compared to 57.7 points in December.
However, the index showed a significant improvement in business conditions, while new orders increased in the first month of the year on the back of competitive prices and the attraction of new clients.
“The January survey indicates that non-oil sector growth got off to a strong start in 2018, notwithstanding the slight decline in the headline index,” Khatija Haque, Head of MENA Research at Emirates NBD, commented.
In response to higher workloads in the beginning of 2018, non-oil private firms hired more employees, bringing job creation to its fastest levels in a year, Emirates NBD’s data showed.
The introduction of the value-added tax (VAT) played a major role in the non-oil private sector during January, raising both costs and prices, and, consequently, wages and salaries, the UAE-based bank revealed.
Furthermore, business confidence grew in the sector, while “panellists predicted that activity will increase once the new VAT system becomes more familiar, with higher new orders also expected to support output growth”, Emirates NBD said.
