09 May 2019
A recent report revealed that non-oil companies in the UAE were boosted in April, due to growth in new orders and business activity driven by improved market conditions.
The Emirates NBD UAE Purchasing Managers’ Index (PMI) for the month of April showed business confidence growing to a record high for the second consecutive month. With that said, in an effort to boost sales, companies decreased their output prices which resulted in visible competitive pressures in the economy.
As the Khaleej Times reports, the headline seasonally adjusted Emirates NBD UAE PMI, being a composite indicator aimed at providing an accurate insight into the operation conditions of the non-oil private sector economy, increased to 57.6 in April from 55.7 in March. This marked the highest business condition improvement since December 2017.
The latest data showed that new orders at UAE non-oil companies increased greatly, recording a 16-month high rate of expansion. Besides improved market conditions, external demand also helped contribute to this growth. New export orders were especially boosted by Saudi Arabia and Oman, allowing the growth rate to nearly reach a four-year high. This, combined with several ongoing projects, caused business activity to increase significantly in April – at the fastest rate seen since January 2015. According to certain panellists, promotional efforts such as discounts offered had aided the growth in activity.
The improvement in volume of activity and new order growth is encouraging, according to Khatija Haque, Head of MENA Research at Emirates NBD. Nonetheless, hiring efforts are still subdued and job growth has not strengthened much.
Haque said: “Household consumption is likely to remain constrained in the absence of job and/or wage growth.”
Around 82% of panellists expected that output would increase over the coming year, while purchasing activity continued to increase.
Additionally, despite a strong demand for inputs, suppliers’ executed deliveries at a faster price due to vendors abiding by the requirements for faster deliveries.