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UAE Sept business activity picks up from 15-mth low
PMI at 52.11 points in sept vs 50.95 in aug; output, new orders pick up, but improvement minor
October 4, 2011 2:41 by Reuters
Growth in private sector business activity in the United Arab Emirates picked up in September from a 15-month low, but the improvement was minor, a purchasing managers’ survey showed on Tuesday.
The HSBC UAE Purchasing Managers’ Index (PMI), which measures the performance of the OPEC member’s manufacturing and services sectors, rose to 52.11 points from August’s 50.95, the survey of 400 private sector firms showed. The 50-point level separates growth from contraction.
“It’s good to see a pick-up in the headline index after four consecutive months of decline, particularly as the gain was driven by strong growth in new orders,” said Simon Williams, chief economist for the Middle East and North Africa at HSBC.
“I’m not ready, though, to see this as the start of an upward trend. Readings for employment and wages still look very weak and I’m anxious that an economy as small and open as the UAE will prove vulnerable to the increasingly serious problems afflicting the rest of the global economy.”
New orders hit a three-month high of 56.95 points on an adjusted basis in September, after 53.54 in the previous month, reflecting better business conditions, stronger market demand and competitive pricing, the survey showed.
But job creation across the UAE’s non-oil private sector remained weak in September, accelerating only marginally from August. Output prices rose at their fastest rate since June, but the rate remained below the average seen in the first half of the year.
Consumer price inflation in the world’s No. 4 oil exporter eased to an 18-month low of 0.6 percent year-on-year in August as housing costs fell.
Robust oil prices and strong trade flows have been helping the UAE economy recover this year from the $25 billion debt restructuring at Dubai’s flagship conglomerate in 2010, but slow credit growth and a weak property sector remain obstacles.
Analysts polled by Reuters in September expected the UAE’s economic output to expand by 3.8 percent this year after a 1.4 percent rise in 2010. However, they trimmed their 2012 growth forecasts because of a worsening global outlook.
(Reporting by Martin Dokoupil; Editing by Andrew Torchia)