Dubai: The UAE's non-oil private sector is starting to regain some of its strength, helped by a rise in new orders as well as export opportunities during the fourth quarter. In the case of exports, it is the first time in five months that order growth is in positive territory.
"Improving client demand and the efforts of sales teams (have) contributed to the rise," states the latest survey from Emirates NBD and produced by IHS Markit. But the gains in new business is coming at a cost.
"Strong gains in output and new orders have been hard-won... with firms continuing to offer discounts and promotions in order to secure orders," said Khatija Haque, Head of Mena Research at Emirates NBD. "Overall, the PMI (purchasing managers index) averaged 53.9 in 2016, well below the 2015 average of 56.0, reflecting slower growth this year.” Activity rose substantially through the last month, and to the greatest extent since August.
"Efforts to secure sales in a competitive environment meant that output prices decreased in December in spite of a further rise in cost burdens," states the report. "Charges have now declined in each of the past 14 months.
"Purchase prices have risen in three successive months, with the latest increase the fastest in this sequence."
The seasonally adjusted Emirates NBD UAE PMI – a composite indicator designed to give an accurate overview of operating conditions in the non-oil private sector economy – ticked up to 55.0 in December from 54.2 in November, thereby signalling a marked monthly improvement in the health of the non-oil private sector, and one that was the strongest since July.
