Dubai: The UAE’s Purchasing Manager’s Index (PMI) data for April showed that the rate of expansion in the non-oil private sector accelerated last month after it eased to the weakest in almost a year-and-a-half in March.

Indicating the overall improvement in business conditions was faster growth of output, new orders and employment.

The UAE’s PMI is a composite indicator of non-oil economy based on data compiled by HSBC and Markit Economics from purchasing executives in approximately 400 private sector companies in the UAE.

The headline PMI for April improved to 56.8 from 56.3 in March.

The overall rate of improvement in business conditions was slower than the average recorded in the first quarter of 2015, but sharper than the 17-month low seen in March.

“The UAE’s non-oil private economy began the second quarter of 2015 on a positive note, with business conditions improving at a faster pace in April. Output, new orders and employment all rose more quickly during the month, contributing to the sharper overall expansion,” said Philip Leake, Economist at Markit.

Latest data showed activity rising in line with the headline index in April. Output growth in the UAE’s non-oil private sector was marked and stronger than the historical trend.

The index for new orders was also consistent with faster growth in April, mirroring the trend shown for output. Incoming new work has risen in each month since the survey began in August 2009. New export orders rose at a similarly marked pace in April, amid reports of new client wins in international markets.

Firms continued to hire additional staff in April, thereby marking a 40-month period of job creation. The rate of workforce growth was solid overall, having accelerated from the three-year low seen in March. Backlogs of work also increased in the latest period, albeit more slowly than in the previous month.

Stronger expansions in output and new orders led to further growth of purchasing activity at UAE non-oil private sector companies in April. Moreover, the latest increase was sharp and faster than the long-run trend.

Pre-production inventories rose solidly during the month, continuing the trend observed throughout the past three years. Total input costs faced by UAE non-oil private sector firms increased in April, having fallen for the first time in five years in March. The rate of inflation was only moderate overall and muted in the context of historic survey data.

“On the price front, cost pressures surfaced following last month’s decline, while output charges fell for the third straight month,” said Leake.

Underlying data indicated that overall cost pressures were supported by moderate rises in both purchase prices and staff costs in the latest period.

“Firms appear to be absorbing higher input costs, as output prices declined for the third consecutive month. Overall, the data supports our view that non-oil sector growth remains robust despite lower oil prices, even as momentum has eased since the start of the year. The recovery in oil prices in recent weeks may boost sentiment and confidence in the coming months,” said Khatija Haque, Head of MENA Research at Emirates NBD.