UAE non-oil private sector grows strongly despite inflationary pressure

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UAE non-oil private sector grows strongly despite inflationary pressure - PMI© Reuters. FILE PHOTO: Folks stroll on the Pedestrian Bridge on the Bluewaters Island in Dubai, United Arab Emirates, December 08, 2021. REUTERS/Satish Kumar

DUBAI (Reuters) – Development within the United Arab Emirates’ non-oil non-public sector strengthened in Could to a five-month excessive as demand remained robust regardless of inflationary pressures, a survey confirmed on Friday.

The seasonally adjusted S&P World (NYSE:) UAE Buying Managers’ Index (PMI) rose to 55.6 in Could from 54.6 in April, rising additional above the collection common since 2009 of 54.1.

The output sub-index additionally reached its highest since December, rising to 62.5 in Could from 61.5 in April, above the collection common of 57.5.

David Owen, economist at survey compiler S&P World Market Intelligence, mentioned the readings indicated the economic system “continues to get well strongly from the pandemic.

“Regardless of the top of the Expo 2020, corporations continued to quote rising order e-book volumes and elevated tourism, though this was partly helped by a renewed decline in common costs charged,” he mentioned, referring to the world honest hosted by Dubai for six months by way of the top of March.

Like a lot of the world, inflation was the primary headwind for the UAE’s non-oil sector.

“Enter prices rose on the quickest charge since November 2018, as firms broadly famous increased gasoline costs in addition to elevated prices for a variety of supplies comparable to aluminium, metal, wooden and chemical substances,” Owen mentioned.

“For now, PMI knowledge recommend that firms are selecting to soak up further prices reasonably than cross them onto clients, however that is unlikely to proceed indefinitely.”

The employment sub-index rose again into progress territory at 50.7 in Could from 49.9 in April, which was the primary time it slipped under the 50-mark that separates enlargement from contraction since Could 2021, albeit marginally.

Whereas nonetheless marginal, it was the quickest charge of job creation since October. Companies mentioned elevated new orders and delays in changing departing workers led to hiring.

Expectations from future output improved in Could from the prior month, with about 15% of survey respondents offering constructive forecasts. Whereas just like latest months, the sub-index was subdued by historic requirements, the PMI report mentioned.