Dubai: The UAE’s private sector economy recorded a sharp spike in activity in June after a rather disappointing May, says the latest Emirates NBD PMI (purchasing managers index) findings.
The June gains were driven by both domestic orders getting placed and gains in productivity.
The increases came as “firms continued to reduce selling prices on average in order to support demand and order growth,” said Khatija Haque, Head of MENA Research at Emirates NBD.
“Overall, the PMI data for H1-2017 supports our view that the non-oil sectors have grown at a faster pace relative to H1-2016.”
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However, on the negative side, employment activity “stagnated”. The rate of job creation eased to an eight-month low to signal a broad stagnation in employment.
Also, export orders fell for the first time in seven months as demand from overseas markets was reduced. And business confidence towards the 12-month outlook eased to the second-lowest in the survey’s history.
There was also renewed increase in input costs, even as businesses continued to offer discounts amid reports of intense competition.
The seasonally adjusted Emirates NBD UAE PMI rose from May’s six-month low of 54.3 to 55.8 in June.
Remaining comfortably above the crucial 50 threshold, the June reading signalled a sharp improvement in the health of the private sector.
Notably, the rate of growth was stronger than the long-run series average (54.5).
What is PMI, Purchasing Managers' Index?
The Purchasing Managers' Index (PMI) is an indicator of the economic health of the manufacturing sector. The PMI is based on five major indicators: new orders, inventory levels, production, supplier deliveries and the employment environment.