Dubai Non-Oil Trade Index Released

The Emirates NBD Purchasing Managers’ Index has released its 2018 figures for the UAE which shows the UAE non-oil private sector has experienced slow growth of late.

Commenting on the UAE PMI survey, Khatija Haque, Head of MENA Research at Emirates NBD, said: “The Emirates NBD Purchasing Managers’ Index (PMI) for the UAE declined to 55.8 in July from 57.1 in June, signalling the slowest rate of growth in the non-oil private sector in three months.

“Both output and new work, while still strong, were softer than in June. Notably, new export orders increased at the sharpest rate in three years, as firms reported stronger demand from other GCC countries and Europe.

“Employment was broadly unchanged in July, with the index barely above the neutral level at 50.2.

“Year-to-date, the employment index averaged 50.8, compared with 51.2 in the same period last year, and indicating even weaker job growth in the UAE’s non-oil private sector this year relative to 2017.

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“Backlogs of work increased sharply again as a result of the strong rise in new orders (and flat employment), although the rate of increase in backlogs was softer than in June.

“While input cost inflation remained relatively modest in July compared with earlier this year, firms continued to lower average selling prices, with output prices declining for the third month in a row.

“The continued squeeze on firms’ margins is likely a key factor in the soft employment survey, as firms remain under pressure to contain costs and boost efficiency.

“Purchasing activity accelerated slightly in July but the actual stock of pre-production inventories was unchanged from June, which suggests that firms may be becoming more efficient in their inventory management.

“Overall, businesses remain very optimistic about the coming year, with more than 60% of respondents expecting their output to be higher in year’s time.

“However, this is lower than the May and June surveys. ”

The main findings of the July survey were as follows:

• Headline PMI cools to 55.8 in July, from 57.1 in June...
• ...although the pace of expansion remains solid in the context of historical data
• New export orders hit three-year high

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