DUBAI: The UAE’s non-oil economy gained momentum in July, driven by a growth in output and new orders, according to a new study.
Emirates NBD’s UAE Purchasing Managers Index (PMI) survey, which monitors activity in the private sector, said that companies increased inventories and employment in response to new orders.
The index rose to a three-month high of 56.0 in July, which was a gain on the 55.8 registered in June. A ranking above 50 represents expansion in the economy, and below 50 indicates contraction. Emirates NBD said that there had been a sharp improvement in operating conditions in the non-oil sector.
It warned, however, that export orders fell at the quickest pace in the history of the survey, and that input costs rose sharply, but companies were unable to pass these on by raising prices due to ‘intense’ competition and concerns over conditions faced by consumers.
Khatija Haque, the head of MENA research at Emirates NBD, said: “The PMI survey in July showed that domestic demand remained robust, offsetting weakness in external demand last month. Firms were more optimistic about the coming year, and increased inventories at a record rate, partly in anticipation of further order growth.”
Emirates NBD also said that growth also picked up in Saudi Arabia as output and new orders picked up, which led to greater job creation.
Egypt faced a further weakening in its economy, although the rate of decline eased slightly.
The Egypt PMI Index stood at 48.6 in July – an increase from 47.2 in June – but the survey said that the economy appears to be stabilizing, with new orders remaining steady for the first time in 21 months.
Input costs rose sharply, though, due partly to cuts to fuel subsidies that have been imposed as part of a package of economic reforms it has embarked upon as part of its loan agreements with the International Monetary Fund.
UAE non-oil economy gains momentum in July
UAE non-oil economy gains momentum in July
