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HSBC Says Economic Recovery and Job Creation Speeding Up in UAE

UAE : 04 May 2011

Private industry in the UAE’s non oil sector experienced increased activity in April and employment in the area surged by the highest rate seen in 16 months, according to a recent HSBC Holdings PLC survey.

The HSBC reported that their PMI (or purchasing managers index) increased to a record high this past April, reaching 57.5 points up from the 54.7-point record set in March. Any point level above the 50 neutral mark is indicative of an expanding economy.

An HSBC chief economist for the MENA region, Simon Williams noted that the recent reading is “very positive” and tells of a recovery that is gaining momentum. Williams admitted that there are many problems and issues to address, however he feels that these numbers are a clear indication that two years beyond the bubble bursting a fresh cycle of growth has begun.

This is the first PMI to be published in the region and was put together with data gathered by Markit thanks to monthly questionnaires answered by execs in the purchasing departments of around 400 businesses within the private industry.

Williams added that, in the same way that the March readings did, April’s index suggests that price pressures are expected for later on in 2011, especially due to the work category backlogs that are now indicating tightened capacity.

The combined conditions of strengthening input demand and political uncertainty in the North African and Middle East regions have increased purchasing costs in April, according to the HSBC. This caused inflation to reach a rate not yet seen in this series.

In the meantime job creation for the UAE non-oil private industries increased in April, indicative of strengthening demand and business expansions.

HSBC noted that employment rates for April experienced the third-fastest rate of improvement in the history of this survey. All three of the business size categories reported similar growth rates, based on survey results.

Paul Holdsworth, Staff Writer, Gulf Jobs Market News
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