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UAE business conditions improve as job hiring picks up

Latest purchasing managers' index indicates increased employment activity in the UAE's non-oil sector

Dubai: Business conditions in the UAE seem to have improved, with the growth of the non-oil private sector accelerating to a ten-month high, partly buoyed by a slight uptick in hiring activity in certain industries, according to the latest data.

The Emirates NBD Purchasing Managers’ Index for July, a benchmark for the operating conditions in the non-oil private sector, indicated that some companies are still hiring new employees.

The bank said the pace of hiring "quickened to a 14-month high," contrasting with the trend over the second quarter, when employment was either stagnant or barely rising.

“The rate of job creation was the fastest in over a year,” the bank said in a statement sent to Gulf News.

Who's hiring

The bank’s findings coincided with the recent employment data released by other analysts. According to the Monster Employment Index, job listings in the UAE went up by 10 per cent in June 2016 compared to a year earlier.

“We expect this positive trend to continue, especially in the UAE, which is seen by economists as the most promising economy in [the Middle East and North Africa],” said Sanjay Modi, managing director for Asia Pacific and Middle Eat at

Businesses in the healthcare sector continue to drive the demand for new employees. Vacancy listings in the industry grew by 46 per cent in June 2016 as compared to the same period last year.

“With the mandatory health insurance scheme in place, the country’s multi-billion-dollar healthcare industry could continue growing double digits in 2016, as all sponsors are now required to enroll their employees for a mandatory medical coverage plan,” said.

Strong footing

Jean Paul Pigat, senior economist at Emirates NBD, said the survey compiled by Markit suggested that the size of the UAE's workforce expanded in July when compared with the previous month, with the employment index going up from 50.5 in June to 52.9 in July- registering an average of 51.5 over the past 12 months.

He, however, clarified that overall, the level of job creation in the past year remained relatively weak. "When you look beneath the figures, it shows that just over 5 per cent of surveyed companies raised employment levels. So it's a 14-month high, but that also is a reflection of the fact that job creation has been quite weak over the past year," Pigat told Gulf News.

Nevertheless, the figures indicated that the UAE’s non-oil private sector economy started off the second half of 2016 on a strong footing.”

“It is encouraging that despite relatively week exports, economic momentum is being supported by stronger domestic demand conditions,” he said.

At 55.3, the headline seasonally adjusted PMI was consistent with a “robust improvement in business conditions in July.” The index also indicated a rebound in growth, having slipped to 53.4 in June.

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