Business activity in the UAE’s non-oil private sector grew faster in May as employment resumed expanding, according to a survey published on Sunday.
The seasonally adjusted Emirates NBD UAE Purchasing Managers’ Index, which covers manufacturing and services, rose to 54.0 last month from 52.8 in April. Anything above 50 means business is expanding; anything below, that it is contracting.
The index for employment rebounded to 50.4 after dropping to 50.0, its lowest level since December 2011, in April.
“The improvement in the UAE PMI was mainly due to strong growth in output last month, with new business picking up as well,” said Khatija Haque, head of regional research at Emirates NBD. “This confirms our view that the non-oil sector of the UAE is continuing to expand, albeit at a slower rate than last year.”
Output growth jumped to 59.9 in May from 56.9 points in April. Growth in new orders rose to 55.8 from 54.6. New export orders expanded after shrinking the month before.
Output prices fell for a seventh straight month. Input price inflation accelerated.
Meanwhile, growth in Saudi Arabia’s non-oil private sector accelerated in May because of a sharp increase in new orders.
The Emirates NBD Saudi Arabia Purchasing Managers’ Index rose to 54.8 last month from 54.2 in April.
“The rise in the Saudi PMI to the highest reading in six months is encouraging, as it shows the resilience of the non-oil economy even in the face of tighter fiscal policy,” Ms Haque, head of regional research at Emirates NBD, said. “Domestic demand remains robust, even as export demand has softened.”
Output growth slipped down to 60.6 from 60.9, but growth in new orders rose to 58.1 from 56.2. Employment growth also rose.
Output price deflation intensified in May, with prices falling for a seventh straight month. Input price inflation slowed.
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