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What is the PMI?

April 2016

April 6, 2016 | 16:30 | Dubai

With the latest Emirates NBD UAE Purchasing Manager’s Index for March climbing to a 4 month high at 54.5, we felt it would be useful to provide an insight into what is the PMI. This is the first of the Wealth Monitor in the Classroom series.

Put simply, the PMI is an indicator of the economic health of the manufacturing sector within a region. The PMI index is based on five major indicators

  • New orders
  • Inventory levels
  • Production
  • Supplier Deliveries
  • Employment Environment

A PMI of more than 50 represents expansion of the manufacturing sector while a reading under 50 represents a contraction.

In the UAE, the Emirates NBD UAE Purchasing Managers Index measures the performance of companies in non-oil private sector and is derived from a survey of 400 companies which include manufacturing, services, construction and retail.

Chart Source - Markit PMI Marketeconomics

Trend of the UAE PMI in the period 2011-2016


Source: tradingeconomics.com

All time high reached on October 2014 of 61.20

Low recorded at 51.70 in December 2011

Commenting on the Emirates NBD UAE PMITM , Khatija Haque, Head of MENA Research at Emirates NBD, said. “While the improvement in the Emirates NBD UAE PMI in March is encouraging, the average PMI for Q1 2016 signals a further slowdown in the non-oil private sector of the UAE at the start of this year. Nevertheless, the solid growth in output and new orders in the first quarter suggests that domestic demand is holding up well despite the headwinds of a strong USD and low oil prices.”

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