• Composite index rose by 1.1 to reach 55.8
  • Improvement courtesy of sharp rebounds in output and new orders

The UAE Purchasing Manager’s Index (PMI) recovered lost ground in June by rising 1.1 points to reach 55.8 in July.

The marked improvement in overall business conditions demonstrates the sector’s resiliency amid challenging regional and global economic environment, according to Jean-Paul Pigat, senior economist at Emirates NBD, which sponsored the PMI survey.

“The rebounds in output and new orders were particularly encouraging, and we expect this momentum to continue through the remainder of 2015,” Pigat noted.

Commercial initiatives, new product launches and new client wins underpinned growth in new work, while stronger order books were reported to have supported output growth.

Other areas that improved in July include pre-production inventories, which rose the fastest since February, and employment. The non-oil private sector has reportedly stayed the path of job creation for 43 months.

The sharp rebounds in output and new orders as well as the marked improvement in other areas measured by the index, however, were tempered by divergent trends on the price front along with an uptick in the rate of cost inflation. Charges also fell for the fifth time in the past six months.

The PMI growth seen in July was broadly in line with the average index of 56.0 during the second quarter of 2015, but remained weaker compared with the average posted during the first half of the year (56.8).

The PMI is based on data input from purchasing executives in 400 private sector companies that represent the economic structure of the UAE non-oil sector, including manufacturing, services, construction and retail.