The latest purchasing managers’ indices (PMI) shows growth in the Arab world’s two largest economies, Saudi Arabia and the UAE, accelerated towards the end of 2012.
The UAE’s PMI hit an 18-month high in December as output and new orders strengthened towards the end of the year, showing strong growth in non-oil industries, according to data from UK-based bank HSBC.
The UAE’s index picked up two points against November, hitting 55.6, which is its highest level since April 2011. The country’s PMI has recovered slowly from a dip in the second half of 2011, remaining above 50 – the level that represents flat growth.
“The strong performance was led by new orders, which rose three points month-on-month to 63, the highest point in the PMI series’ three-and-a-half year history,” said HSBC Middle East economist Simon Williams in a research note.
Meanwhile, Saudi Arabia’s PMI rose almost two points month-on-month to hit 58.9 in December. The increase was strongly underpinned by a growth in new orders, which rose three points to 67.
Saudi Arabia is planning record spending in its 2013 budget, as the kingdom continues to pursue expansionary fiscal policies in the wake of political unrest around the region.