Business activity growth in the United Arab Emirates’ non-oil private sector accelerated in August to a six-month high, a corporate survey showed on Thursday.
The seasonally adjusted Emirates NBD UAE Purchasing Managers’ Index, which covers manufacturing and services, rose to 57.1 points last month from 55.8 in July. A level above 50 indicates expansion.
“The sharp rise in the UAE PMI in August confirms our view that Ramadan likely contributed to the softer readings in June and July,” said Khatija Haque, head of regional research at Emirates NBD. The Muslim holy month of Ramadan, when some business traditionally slows, fell in June and July this year.
Output growth surged to 63.1 points in August from 60.0 in July, while new orders rose to 61.3 from 60.2. Growth in new export orders, however, slowed sharply to 54.4 points.
“Encouragingly, new orders and output growth readings remain high, suggesting strong domestic demand. Slower growth in export orders last month may reflect the impact of currency appreciation relative to other emerging markets,” Haque said. The UAE dirham is pegged to the U.S. dollar, which has been strong.
Employment growth slowed slightly but remained positive. Output prices fell for the second month in a row, with the index at 49.2 points, but input price inflation was positive and picked up slightly.