The UAE will host Expo 2020!
  • Arabic
Supported by the UAE National Media Council
We are in the process of developing and improving our website, and we invite you to participate in our brief survey to measure the level of your satisfaction
Satisfaction Survey For UAE Interact Website
رغبة منا بالتعرف على مستوى رضاكم عن موقعنا وبهدف تطويره وتحسينه، فقد قمنا بتصميم استبيان سريع لقياس مدى الرضا عن موقع دولة الإمارات العربية المتحدة روعي في تصميم الاستبيان أن يكون قصيرا وسريعا كي لا نطيل عليكم، وعليه نرجو منكم التكرم باستكماله عن طريق الرابط التالي
استبيان رضا المتعاملين عن موقع دولة الإمارات العربية المتحدة

UAE's non-oil sector expands at steady pace

posted on 11/07/2016: 2198 views



The UAE non-oil private sector expanded at a steady pace in June fuelled by higher output and new orders, a new survey shows.

The Emirates NBD UAE Purchasing Managers' Index - a composite indicator designed to give an accurate overview of operating conditions in the non-oil private sector economy - slipped to 53.4 in June, from 54.0 in May.

While still pointing to growth of the non-oil private sector, the latest figure was much lower than the average over the past three years (56.3). The reading was nevertheless in line with the second quarter trend (53.4), Emirates NBD said.

"Output continued to rise sharply in June. Though easing from May's eight-month high, the rate of expansion was marked overall. Stronger marketing and healthy demand were reported to have bolstered activity. However, in the context of data since the beginning of 2014, growth was relatively subdued," the bank said.

Khatija Haque, head of Mena research at Emirates NBD, said the softening in new business and output growth in June may partly be due to the earlier start to the holy month of Ramadan this year. Nevertheless, the output index remains relatively high and we continue to expect solid non-oil growth in the UAE this year, said Haque.

The respective rates of growth, however, were subdued compared to those seen over the course of 2014 and 2015, the bank noted. Both employment and purchasing activity rose only modestly. Meanwhile, cost pressures intensified to the most marked since September last year, but output prices continued to fall regardless.

The upturn in total new business was maintained in June, helped by a second successive expansion in exports. But the respective rates of growth were subdued compared to long-run trends.

"Employment barely contributed to growth of the non-oil private sector as a whole. The rate of hiring was among the weakest recorded by the survey and marginal overall. This was in line with the near-stagnant trend seen over the second quarter. Backlogs of work meanwhile increased for the sixth month in a row, albeit modestly," the bank said.

The relative weakness of order books was borne out by muted growth of purchasing activity in June. The pace of expansion had eased to a 56-month low in May, and it quickened only slightly in the latest period.

Stocks of raw materials and semi-manufactured goods rose at a similarly modest rate. Those firms that raised inventory levels did so in expectation of future improvements in demand.

On the price front, total input costs faced by UAE non-oil private sector firms increased more quickly in June. Both salaries and purchase prices rose at a faster pace, leading the overall rate of inflation to reach a nine-month high.

The bank said the rise in input costs was insufficient to push charges higher. Output prices fell for the eighth month running, albeit fractionally.

In Saudi Arabia, non-oil private sector maintained its growth at a steady rate in June, as highlighted by a further solid improvement in business conditions.

"Output and new orders both rose sharply, leading firms to raise their input buying at a marked pace. However, the respective rates of expansion remained subdued in the context of historical data. Weak job creation continued to undermine overall growth, as did falling exports. On the price front, input costs rose to the greatest extent in seven months, contributing in turn to a first increase in charges since October last year," Emirates NBD said.

"The non-oil sector in Saudi Arabia is expanding at a robust rate, despite low oil prices, government spending cuts and more recently, higher interbank lending rates. Firms appear to be increasing operating efficiency, as jobs growth remains sluggish even as activity and new orders are rising," said Haque. – Khaleej Times - http://www.khaleejtimes.com/business/local/uaes-non-oil-sector-expands-at-steady-pace

RELATED ARTICLES

29 June 2017 Dubai Economy, Souq.com launch Digital Protection initiative
23 May 2017 Minister of Economy urges investors to support the entrepreneurial ecosystem in the UAE
11 May 2017 UAE participates in 2nd IORA Blue Economy Ministerial Conference
25 April 2017 SEDD launches ‘Sharjah Industrial Guide’ project
13 April 2017 Arab economies are projected to grow by 2.3 percent in 2017, 2.7 percent in 2018: AMF


Most Read