(MENAFN- The Arabian Post) data suggested that the UAE's non-oil private sector regained some of the growth momentum that was lost at the end of the second quarter. Output and new orders both rose at sharper rates, contributing to a robust overall improvement in business conditions.
Job creation was also sustained at a solid pace. On the price front, data highlighted divergent trends in July. The rate of cost inflation picked up to the quickest since February, while charges fell for the fifth time in the past six months.
The survey, sponsored by Emirates NBD and produced by Markit, contains original data collected from a monthly survey of business conditions in the UAE non-oil private sector.
Commenting on the Emirates NBD UAE PMITM, Jean-Paul Pigat, Senior Economist at Emirates NBD, said: "July's PMI is another indication that growth in the UAE's non-oil economy is proving resilient in the face of a challenging regional and global economic environment. The rebounds in output and new orders were particularly encouraging, and we expect this momentum to continue through the remainder of 2015."
Key Findings
- PMI ticks up from June's recent low
- Marked expansions in output and new orders
- Selling prices fall for fifth time in six months
Rising from June's 22-month low of 54.7 to 55.8, the headline seasonally adjusted Emirates NBD UAE Purchasing Managers' Index„¢ (PMI) € a composite indicator designed to give an accurate overview of operating conditions in the non-oil private sector economy € was consistent with a robust improvement in July.
Growth at the start of Q3 was broadly in line with the average seen over the second quarter (56.0), but remained weaker than the trend recorded so far this year (56.8).
The overall acceleration was mainly driven by faster expansions in output and new business during July. The respective rates of growth were marked overall, having quickened from the recent lows seen in June. Commercial initiatives, new product launches and new client wins were all mentioned as factors behind higher new work. Subsequently, stronger order books were reported to have supported output growth.
Reflective of the trend seen for total new orders, exports rose more quickly in July. Furthermore, the latest increase was strong in the context of historical data.
Greater business requirements led to another expansion in purchasing activity at UAE non-oil private sector firms. The respective index picked up from June's near-two year low to signal a marked increase, similar to those seen for output and new work intakes. As a result, pre-production inventories rose at the fastest pace since February.
Non-oil private sector employment in the UAE continued to increase in July, marking a 43-month period of job creation. The rate of hiring was unchanged from June's solid pace, and remained in line with the average noted over six years of data collection. A number of panellists associated workforce growth with the start-up of new projects.
Meanwhile, cost pressures intensified in July, amid faster rises in both purchase prices and salaries. The rate of input price inflation picked up to a five-month high, but remained subdued relative to the series average.
In contrast, prices charged by UAE non-oil private sector companies decreased in July. Although marginal, the latest fall was the fifth in the past six months. Some firms saw their pricing power diminish as they attempted to secure new business.
The next UAE PMI Report will be published on September 3rd 2015 at 09:30 (DUBAI)
About The Emirates NBD UAE Purchasing Managers' Index
The Emirates NBD UAE Purchasing Managers' Index is based on data compiled from monthly replies to questionnaires sent to purchasing executives in approximately 400 private sector companies, which have been carefully selected to accurately represent the true structure of the United Arab Emirates non-oil economy, including manufacturing, services, construction and retail.
The panel is stratified by Standard Industrial Classification (SIC) group, based on industry contribution to GDP. Survey responses reflect the change, if any, in the current month compared to the previous month based on data collected mid-month. For each of the indicators the 'Report' shows the percentage reporting each response, the net difference between the number of higher/better responses and lower/worse responses, and the 'diffusion' index. This index is the sum of the positive responses plus a half of those responding 'the same'.
The Purchasing Managers' Index„¢ (PMI„¢) is a composite index based on five of the individual indexes with the following weights: New Orders € 0.3, Output € 0.25, Employment € 0.2, Suppliers' Delivery Times € 0.15, Stock of Items Purchased € 0.1, with the Delivery Times index inverted so that it moves in a comparable direction.
Diffusion indexes have the properties of leading indicators and are convenient summary measures showing the prevailing direction of change. An index reading above 50 indicates an overall increase in that variable, below 50 an overall decrease. Markit do not revise underlying survey data after first publication, but seasonal adjustment factors may be revised from time to time as appropriate which will affect the seasonally adjusted data series.
About Emirates NBD
Emirates NBD is a leading banking Group in the region. As at 31st March 2015, total assets were AED 367.5 billion, (equivalent to USD 100). The Group has a leading retail banking franchise in the UAE, with more than 215 branches and over 889 ATMs and CDMs in the UAE and overseas. It is a major player in the UAE corporate and retail banking arena and has strong Islamic banking, Global Markets & Treasury, Investment Banking, Private Banking, Asset Management and Brokerage operations.
The Group has operations in the UAE, Egypt, the Kingdom of Saudi Arabia, Qatar, Singapore, the United Kingdom and representative offices in India, China and Indonesia.
The Group is an active participant and supporter of the UAE's main development initiatives and of the various educational, environmental, cultural, charity and community welfare establishments.
About Markit
Markit is a leading global diversified provider of financial information services. We provide products that enhance transparency, reduce risk and improve operational efficiency. Our customers include banks, hedge funds, asset managers, central banks, regulators, auditors, fund administrators and insurance companies. Founded in 2003, we employ approximately 4,000 people in 11 countries. Markit shares are listed on Nasdaq under the symbol MRKT.
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