Source: Dow Jones Newswires
Non-oil private sector business activity in the United Arab Emirates surged to a 10-month high in April, as new business orders rose and employers hired more staff, a report from HSBC Holdings PLC (HBC) showed Thursday.
HSBC said its purchasing managers index, or PMI, climbed to 53.5 in April, from 52.3 in March, the biggest monthly increase since October 2011. A reading above the neutral 50 level indicates the economy is expanding.
“Sharper expansions were recorded in output, total new business, buying activity and employment, pointing to an improved business environment,” said HSBC. “Price pressures eased over the month, but remained solid”.
Simon Williams, chief economist for Middle East & North Africa at HSBC, said while it is encouraging that the data picked up so strongly in April there are still some grounds for caution.
“This is only one good month’s data after 6 months in the doldrums, and the quieter summer months could put a dent in the uptrend. The U.A.E. also continues to be held back by both tight monetary conditions and a limited fiscal stimulus,” said Williams.
“However, against a backdrop of stronger macro indicators out of Dubai in particular, the April number is positive,” he added.
According to HSBC’s PMI reading, new work for UAE non-oil private sector companies grew at the quickest pace for three months, reflecting stronger market demand and a more stable economic environment.
HSBC’s latest report also showed that overall input price inflation eased to a three-month low, but still remained above the long-run trend for the series, driven by rising purchase prices.
The PMI index, the first of its kind to be published in the Gulf, was compiled with data provider Markit and based on data compiled from monthly replies to questionnaires sent to purchasing executives in approximately 400 private sector companies.