The UAE’s non-oil private sector saw the strongest quarter in two years in the three months to September 30, according to Emirates NBD.
The banks purchasing managers index, produced by IHS Markit, showed improving business conditions with above average increases in output and new orders.
The average score in the third quarter was 56.1, the highest since Q3 2015’s 56.3. However, in September itself the PMI actually decreased from a 30-month high of 57.3 to 55.1
“Although the headline purchasing managers index eased slightly in September, the average reading for Q3 was the highest in two years, underpinned by strong growth in output and new work. The survey suggests that economic growth accelerated last quarter, and that domestic demand remains solid, despite relatively modest jobs growth,” said Khatija Haque, head of MENA research at Emirates NBD.
September data showed firms reporting a sharp increase in output, with a steep rate of growth despite the pace of expansion slowing from a four-month high in August.
There was also strong underlying demand for goods and services porducts in the country and a sharp expansion in incoming new work but new business demand from abroad contracted suggesting the recovery was driven by domestic demand.
Job creation continued to rise but remained slight overall after easing since August.
Survey data showed companies reduced their output charges and panellists said they had decreased prices to increase their competiveness.
Average cost burdens increased at the slowest pace for four months and stock of purchases grew at the second fastest rate recorded in the survey’s history.
There was also an uptick in business confidence due to hopes of an uptick in demands for goods and services but this still remained subdued in comparison to historical data.