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June 5, 2016 | 10:30 | Dubai
The upturn in the UAE’s non-oil private sector regained some momentum midway through the second quarter, thanks mainly to a sharp expansion of output. Activity increased at the fastest pace in eight months during May, helped by a pick-up in new business growth. However, data pointed to areas of underlying fragility, as both employment and input buying rose only slightly. The expansion of the latter was the least marked since September 2011. Cost pressures intensified but remained historically subdued, while output prices fell for the seventh month running.
The survey, sponsored by Emirates NBD and produced by Markit, contains original data collected from a monthly survey of business conditions in the UAE non-oil private sector. Adjusted for seasonal influences, the headline Emirates NBD UAE Purchasing Managers’ Index (PMI) – a composite indicator designed to give an accurate overview of operating conditions in the non-oil private sector economy – posted 54.0 in May, up from 52.8 in April. The latest figure was the second-highest in six months, albeit still below the long-run series average (54.5). Employment however remained an area of concern in May. While job creation resumed following a stagnation in April, the rate of hiring was marginal and among the weakest seen in nearly seven years of data collection. Incoming new projects therefore placed pressure on operating capacity, though backlogs rose only slightly.