Business activity in the UAE declined last month, according to the latest purchasing managers’ data released yesterday.
The UAE’s non-oil private sector edged down in July to 58.0 points, from 58.2 points in June, showed the HSBC UAE Purchasing Managers’ Index, which measures the performance of the manufacturing and services sectors.
It stayed close to a peak of 58.3 points hit in April, which was the highest level since the survey was launched in August 2009.
A reading above 50 points in the survey of 400 private-sector firms indicates expansion, and below 50 contraction.
“It’s another very strong number for a UAE economy that’s still in the sweet spot,” said Simon Williams, the chief economist for the Middle East and North Africa at HSBC. “Prices are stable, growth is good and high readings for new orders show demand still building momentum.”
Output growth dropped to 61.6 points last month from 63.3 points in the previous month, while new-orders growth fell more moderately.
Employment growth slowed slightly but stayed comfortably in positive territory.
Input price inflation edged down to 55.0 points, while output price growth increased slightly but was still negative at 49.5 points.
Recent forecasts from the Institute of International Finance (IIF) show that the country’s non-oil economy will grow at 5.4 per cent this year – the highest rate in seven years.
Upbeat second-quarter earnings from the banking sector and property companies provided ample evidence of surging confidence in the economy.
The IIF also forecast the UAE’s overall GDP growth will ease to 4.2 per cent for the year, down from 4.7 per cent last year. The IMF’s revised growth outlook of 4.4 per cent for the overall economy comes close to the IIF forecast.
Meanwhile, growth in Saudi Arabia’s non-oil business activity accelerated last month to its fastest level since September 2012, boosted by strong output and new orders.
The PMI rose to 60.1 points last month from 59.2 points in June.
The subindex for output, at 65.3 points, was the highest since February 2012, while the new orders subindex was the highest since September last year.
Rising numbers of new projects and good market conditions were cited as reasons for last month’s rapid growth in activity.
However, capacity constraints were evident in a rise in the subindex for backlogs of work, which at 55.6 points was the highest since the survey began in August 2009.
The rates of inflation of purchase costs, staff costs and overall input prices accelerated last month from June, as did growth in output prices.
* with Reuters
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