Rising purchasing managers index show robust growth in non-oil sector
The UAE’s purchasing managers’ index (PMI) rose half a point in September, showing continued solid growth in the country’s non-oil sectors.
The PMI index rose to 53.8 points, increasing further above the 50 level that represents flat growth, according to data from UK-based bank HSBC. New orders jumped seven points to a 15-month high of nearly 61.
“Employment is still growing moderately and overall output was up on last month, adding weight to the view that a sharp drop in backlogs of work was due to productivity gains” says Simon Williams, an analyst at HSBC. At 54 points, new export orders also looked firm and backed up strong data from the tourism, transport and trade sectors, he adds.
The bank recently revised its gross domestic product (GDP) growth forecasts for the UAE higher to 3.7 per cent for this year and 4 per cent for 2013. In a separate forecast, National Bank of Abu Dhabi (NBAD) this week revised its GDP growth outlook for this year up to 3.2 per cent from 2.6 per cent. It expects this to slow to 3.2 per cent in 2013.
HSBC warned that recent downwards revisions on economic growth in the Eurozone would have a negative impact on the UAE economy. GDP in the 17-nation bloc is expected to retreat in both 2012 and 2013.
“PMI price indicators are also testament to the limitations on growth in the UAE, in an environment where fiscal policy is tight and credit growth is elusive,” said Williams. PMI price indicators for the UAE were 54.6 points for company input costs, 50.4 points for output prices and 51.8 for wages.