Business activity in the UAE edged to a new peak last month as private-sector commerce strengthened despite the protests across the Mena region.
Nevertheless, pricing pressure intensified during February as non-oil companies began to pass on higher costs to customers, according to HSBC's purchasing managers' index (PMI).
As a result input and output prices both accelerated at their fastest rate in the survey's 19-month history.
"The recovery is on but still slow," said Simon Williams, HSBC's chief economist for the Mena region. "The regional unrest is yet to weigh on business activity as it will take time for investment plans to adjust and for any effect on new orders."
Last month's seasonally adjusted headline PMI rose to a peak of 54.3, up slightly from 54.2 in January. The PMI has now registered above 50, the threshold for no change, for 18 months.
Next month's data should offer a clearer indication of the impact of recent turmoil in Tunisia, Egypt, Libya and elsewhere, said Mr Williams. Many companies in the UAE have trade and investment links with regional economies hampered by a paralysis of commerce because of the unrest in parts of the Mena region.
New orders rose last month at a sharp pace, with the latest increase the second-highest in the survey's history. Improvements in both domestic and foreign demand contributed to the rise, although business at home accounted for the lion's share of new expansion. More than a quarter of the surveyed companies recorded a gain in new orders compared with January, citing favourable economic conditions, company expansions and new products among drivers of growth.
To accommodate more orders, companies increased purchases of stock.
Job creation was the highest last month in four months, with 9 per cent of companies hiring additional staff. The rise represented the 19th consecutive month in which respondents added to their workforce.
Despite employment gains, the data showed few companies increased wages.
Less than 2 per cent of firms surveyed said their salary bill had increased.
In contrast, other financial outgoings during the month rose. A total of 18 per cent of firms reported rises in overall spending on inputs. Higher fuel and raw material costs were chiefly responsible for the increase.
Prices for materials as diverse as copper and cocoa have risen in recent months. To offset these increases, companies raised charges for goods and services.
"There's pressure on profit margins and on wages as the demand environment is not strong enough to feed through entirely to higher consumer costs," said Mr Williams.
As a result, the moderate increase in output costs was still not enough to raise the likelihood of a significant pick-up in inflation, he said.
Consumer prices rose 1.6 per cent in January compared with the same month last year, according to the latest figures from the National Bureau of Statisics. But the index slid by 0.27 per cent in January from December, the data released this week show.
[ tarnold@thenational.ae ]
MATCH INFO
Manchester City 4 (Gundogan 8' (P), Bernardo Silva 19', Jesus 72', 75')
Fulham 0
Red cards: Tim Ream (Fulham)
Man of the Match: Gabriel Jesus (Manchester City)
DEADPOOL & WOLVERINE
Starring: Ryan Reynolds, Hugh Jackman, Emma Corrin
Director: Shawn Levy
Rating: 3/5
COMPANY PROFILE
Name: Xpanceo
Started: 2018
Founders: Roman Axelrod, Valentyn Volkov
Based: Dubai, UAE
Industry: Smart contact lenses, augmented/virtual reality
Funding: $40 million
Investor: Opportunity Venture (Asia)
The biog
From: Upper Egypt
Age: 78
Family: a daughter in Egypt; a son in Dubai and his wife, Nabila
Favourite Abu Dhabi activity: walking near to Emirates Palace
Favourite building in Abu Dhabi: Emirates Palace
ROUTE TO TITLE
Round 1: Beat Leolia Jeanjean 6-1, 6-2
Round 2: Beat Naomi Osaka 7-6, 1-6, 7-5
Round 3: Beat Marie Bouzkova 6-4, 6-2
Round 4: Beat Anastasia Potapova 6-0, 6-0
Quarter-final: Beat Marketa Vondrousova 6-0, 6-2
Semi-final: Beat Coco Gauff 6-2, 6-4
Final: Beat Jasmine Paolini 6-2, 6-2
Tomb Raider I–III Remastered
Developer: Aspyr
Publisher: Aspyr
Console: Nintendo Switch, PlayStation 4&5, PC and Xbox series X/S
Rating: 3/5
Islamic Architecture: A World History
Author: Eric Broug
Publisher: Thames & Hudson
Pages: 336
Available: September
WWE Evolution results
- Trish Stratus and Lita beat Alicia Fox and Mickie James in a tag match
- Nia Jax won a battle royal, eliminating Ember Moon last to win
- Toni Storm beat Io Shirai to win the Mae Young Classic
- Natalya, Sasha Banks and Bayley beat The Riott Squad in a six-woman tag match
- Shayna Baszler won the NXT Women’s title by defeating Kairi Sane
- Becky Lynch retained the SmackDown Women’s Championship against Charlotte Flair in a Last Woman Standing match
- Ronda Rousey retained the Raw Women’s title by beating Nikki Bella
The specs
Engine: 6-cylinder, 4.8-litre
Transmission: 5-speed automatic and manual
Power: 280 brake horsepower
Torque: 451Nm
Price: from Dh153,00
On sale: now
Living in...
This article is part of a guide on where to live in the UAE. Our reporters will profile some of the country’s most desirable districts, provide an estimate of rental prices and introduce you to some of the residents who call each area home.
Fixtures
Opening day Premier League fixtures for August 9-11
August 9
Liverpool v Norwich 11pm
August 10
West Ham v Man City 3.30pm
Bournemouth v Sheffield Utd 6pm
Burnley v Southampton 6pm
C Palace v Everton 6pm
Leicester v Wolves 6pm
Watford v Brighton 6pm
Tottenham v Aston Villa 8.30pm
August 11
Newcastle v Arsenal 5pm
Man United v Chelsea 7.30pm
Uefa Nations League: How it works
The Uefa Nations League, introduced last year, has reached its final stage, to be played over five days in northern Portugal. The format of its closing tournament is compact, spread over two semi-finals, with the first, Portugal versus Switzerland in Porto on Wednesday evening, and the second, England against the Netherlands, in Guimaraes, on Thursday.
The winners of each semi will then meet at Porto’s Dragao stadium on Sunday, with the losing semi-finalists contesting a third-place play-off in Guimaraes earlier that day.
Qualifying for the final stage was via League A of the inaugural Nations League, in which the top 12 European countries according to Uefa's co-efficient seeding system were divided into four groups, the teams playing each other twice between September and November. Portugal, who finished above Italy and Poland, successfully bid to host the finals.
Frida
Director: Carla Gutierrez
Starring: Frida Kahlo
Rating: 4/5
The five pillars of Islam
Getting there and where to stay
Fly with Etihad Airways from Abu Dhabi to New York’s JFK. There's 11 flights a week and economy fares start at around Dh5,000.
Stay at The Mark Hotel on the city’s Upper East Side. Overnight stays start from $1395 per night.
Visit NYC Go, the official destination resource for New York City for all the latest events, activites and openings.
Sarfira
Director: Sudha Kongara Prasad
Starring: Akshay Kumar, Radhika Madan, Paresh Rawal
Rating: 2/5
Fixtures
Wednesday, April 3
Arsenal v Luton Town, 10.30pm (UAE)
Manchester City v Aston Villa, 11.15pm (UAE)
Thursday, April 4
Liverpool v Sheffield United, 10.30pm (UAE)
Jeff Buckley: From Hallelujah To The Last Goodbye
By Dave Lory with Jim Irvin
The specs
Engine: 3.8-litre twin-turbo V8
Power: 611bhp
Torque: 620Nm
Transmission: seven-speed automatic
Price: upon application
On sale: now
Dhadak
Director: Shashank Khaitan
Starring: Janhvi Kapoor, Ishaan Khattar, Ashutosh Rana
Stars: 3