The performance of the UAE’s non-oil private sector improved slightly in January thanks to expansions in output and new work and a slight increase in hiring, according to Emirates NBD.
The bank’s Purchasing Manager’s Index (PMI) increased from 55.0 in December to 55.3 in January the highest reading since July last year and well above the 53.9 average seen in 2016.
This improvement as driven by an increase in new work, which rose at its fastest rate in 16 months due to promotions, increased client demand and improved underlying economic conditions, the bank said.
Survey respondents indicated they had increased output and input to cater for existing demand and new orders, although at a slightly slower rate than the previous month.
There was also an increase in hiring but this failed to impact work backlogs, with 91 per cent of firms indicating no change in work-in-hand.
The data indicated mounting cost pressures on the non-oil private sector, as purchasing prices increased and staff costs rose slightly.
Meanwhile, output charges decreased for the 15th consecutive month due to increased market competition.
Emirates NBD said businesses remained optimistic in their 12-month outlook for output this year, with firms noting improvements in market conditions and strengthening client demand.