UAE PMI score recovers in June

Judith Bessette
Julho 4, 2017

The latest index reading signalled a solid deterioration in the overall health of the sector.

At 47.2 in June, the headline seasonally adjusted Emirates NBD Egypt Purchasing Managers' Index™ (PMI) - a composite indicator created to give an accurate overview of operating conditions in the non-oil private sector economy - was broadly unchanged from 47.3 in May.

The bank sponsors the monthly survey of business conditions in the UAE's non-oil private sector undertaken by Markit, a financial information services company.

However, the rate of job creation eased to an eight-month low to signal a "broad stagnation" in employment, it found. "Employment rose at a slightly faster rate in June (51.4) but remains relatively sluggish in the context of consistently strong growth in output in recent months", Khatija Haque, Emirates NBD's head of Mena research, said in a statement.

However, new export orders fell for the first time in seven months as demand from worldwide markets reduced, said the report.

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Also, growth in new orders quickened from May's five-month low to the fastest pace since August 2015.

"Encouragingly, new export orders increased in June after two months of decline". Growth in new export orders continued for the third month in succession amid reports of greater interest from global markets. The rise in orders comes as average selling prices fell for the third month in a row, with firms also citing increased marketing efforts to support order books. In spite of increased cost pressures, firms continued to offer discounts amid reports of intense competition.

The combination of more projects, trends in new orders and favourable economic conditions was reported to have contributed to greater business activity by survey respondents.

On the price front, input price inflation was slightly above May's survey-record low. "While construction firms remain upbeat overall about their near-term growth prospects, the degree of confidence fell to its lowest so far this year", Tim Moore, Senior Economist at IHS Markit commented.

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