UAE private sector growth hits 19-month high in Dec
The UAE’s non-oil private sector recorded a 19-month high growth in December 2012 and that marks a positive start for the country’s economy in 2013.
This was revealed by the HSBC UAE Purchasing Managers’ Index on Sunday. The Index, which measures the performance of the manufacturing and services sectors, climbed two points to 55.6, the highest since May 2011. A reading above 50 points in the survey of 400 private sector firms means the sector is expanding.
“It is a fitting reading to mark the end of a strong recovery year for the UAE. Good output growth, firm new orders from home and abroad and a pick up in job creation point to an economy that is growing at a solid pace and well placed to maintain momentum,” Simon Williams, chief economist for Middle East and North Africa at HSBC, said in the report.
“While the UAE will still likely lag some of its neighbours, the economy enters 2013 at its most positive in five years,” Williams added.
Business conditions in the UAE non-oil producing private sector improved solidly during December, the survey said, adding that output continued to increase at a solid pace and the growth rate of new orders was the sharpest since the survey was launched in August 2009. Meanwhile, employment levels rose further and purchasing activity increased at the strongest rate in 18 months, it added.
“Overall, the December PMI data is encouraging, and suggests that the non-oil private sector economy is growing solidly,” Emirates NBD commented in a research note. “The most positive aspect of the last quarter’s data in our view is that domestic demand in the UAE appears to be recovering well, even in the absence of the substantial fiscal stimulus that has boosted demand in Saudi Arabia,” according to the note.
The survey said production in the UAE witnessed a solid rise during December, and the index recorded its highest reading since May 2011. New order levels continued to increase, and the growth rate of new work was the sharpest August 2009, it added. According to anecdotal evidence, both higher output levels and increased new orders were partly driven by improving economic and market conditions.
Overall input prices continued to increase in the UAE non-oil producing private sector during December. That said, the rate of input price inflation eased and was the lowest since September 2010. While average purchase prices increased at a similar pace to November, the rate of wage inflation was slightly lower than in the previous month. The main reasons behind the latest inflation were general inflationary pressures and increased living costs, respectively, the report said.
Output prices charged by UAE non-oil producing private sector companies remained broadly unchanged as the majority of respondents recorded steady tariffs.
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