UAE's Non-Oil Sector Gained Ground In March As Per Emirates NBD's Economic Indicator
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It looks like the economic diversification efforts undertaken by UAE are paying off: Emirates NBD’s UAE Purchasing Managers’ Index (PMI) data for March has shown encouraging growth signs for the UAE’s non-oil private enterprises. The PMI, which is a result of a survey sponsored by Emirates NBD and conducted by Markit, is an indicator of operating conditions in the non-oil private sector, and it was seen to have picked up for the second consecutive month in March, ending at a four-month high of 54.5- up from 53.1 in February and from January’s nearly four-year low of 52.7. There were encouraging increases in both production output and new orders for the private sector in March, despite a fall in exports. While the rate of employment also moved in a positive direction, the rate at which it grew was still found to be marginally lower than previous months.
However, the effect of oil prices continue to affect non-oil sectors such as manufacturing, construction, services etc.- the average PMI for the entire first quarter of 2016 was found to be trailing behind the position back in 2012. “While the improvement in the Emirates NBD UAE PMI in March is encouraging, the average PMI for Q1 2016 signals a further slowdown in the non-oil private sector of the UAE at the start of this year,” said Khatija Haque, Head of MENA Research, Emirates NBD, in a statement. She added that the growth in output and new business orders nevertheless suggested that demand was holding its ground in UAE despite the current situation with the oil prices. The survey participants (comprising of purchase managers in the private sector) admitted to stronger-than-expected sales in month and also reported to be upbeat towards future demand. Backlogs in work, a worrying industrial scenario in recent times, only saw a “fractional increase,” indicating an efficiency on part of the sector when it comes to managing production and sales.