March was a good month for the UAE according to a recent HSBC Holdings PLC survey, which stated that economy in the Emirates is in recovery mode as outputs and new orders experience a sharp climb and job creation picks up again. This is the fourth consecutive month for job growth in the UAE.
HSBC’s Purchasing Managers Index (or PMI) reached a record high in March, climbing up from the 54.3 seen in February to 54.7 for March. This gauge has been sitting above 50, the official no-change mark, for 19 successive months.
This is the first published index of its kind in the Gulf region. Markit, a known data provider, compiled the index using data gathered from questionnaire replies sent out monthly and aimed at the purchasing executives of around 400 businesses in the private sector.
Any reading that registers above 50 is an indication of an expanding economy.
Since new orders and output in the UAE experienced a steep climb in March, Simon Williams of the HSBC noted that positive readings are a result and continue pointing towards a slowly accelerating recovery. Williams is the HSBC Middle East and North Africa’s chief economist.
Over the long term Williams stated that the UAE will see their position as the leading business hub in the region enhanced due to the difficulties in other locales, even though tourism and foreign investments might be hit in the short term.
The HSBC study reported that the number of jobs created has risen for the fourth consecutive month thanks to strengthening market conditions that drove non-oil private businesses in the UAE to hire more staff in March. Employment experienced a strong and increasing pace that will help firms to manage backlogs. HSBC did report, however, that backlog clearances have diminished to reach the joint-slowest pace as of yet.
Inflationary pressures within the Emirates have continued throughout March however, mainly due to rising prices on commodities.
The inflation of input prices rose in March, reaching an all-time high for the survey. This increase reflects the unprecedented surges in the cost of staffing and purchases. Higher purchase costs were due to increases in the price of raw materials and higher staffing costs were caused by increased costs of living and strong business performance, according to the HSBC.Paul Holdsworth, Staff Writer, Gulf Jobs Market News