The UAE's non-oil economy rose to a three-month high in November, boosted by steep growth in output and new business, according to a key gauge of the sector. Purchasing activity rose at the highest pace since the survey began in 2009, suggesting that the economy is turning the corner following several difficult years amid low oil prices.
The Emirates NBD UAE Purchasing Managers' Index (PMI) rose to 57 in November from 55.9 in October, the sharpest pace of expansion since August. The survey is sponsored by Emirates NBD, Dubai's biggest bank by assets, and produced by IHS Markit, a financial information services company. A reading above 50 suggests that the non-oil economy is growing, while a reading below 50 suggests a contraction.
"The PMI reading for November confirms our view that the UAE's non-oil sector will likely see strong growth in the fourth quarter of this year, as both households and business will likely boost purchases before VAT comes into effect at the start of next year," said Khatija Haque, head of MENA Research at Emirates NBD.
"However, the continued softness in employment and lack of wage growth suggests that any boost to household consumption this quarter will likely prove temporary."
The survey, which polls purchasing executives in more than 400 companies, found that selling prices dropped for the third straight month in November as firms reduced prices to stoke demand. Still, the rate of discounting was not as heavy as in the previous month, the survey noted.
When it came to output growth, the rate of expansion was the fastest in 33 month, according to the survey.