UAE non-oil private sector grows at fastest pace in 38 months – PMI

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DUBAI, Sept 5 (Reuters) – The United Arab Emirates’ non-oil private sector grew in August at its fastest pace since June 2019, boosted by better demand and lower selling prices, though sentiment about the future slipped to a 17-month low, a survey showed on Monday.

The seasonally adjusted S&P Global UAE Purchasing Managers’ Index (PMI) rose to 56.7 in August from 55.4 in July, jumping to a 38-month high and further exceeding the series average since 2009 of 54.2.

David Owen, economist at survey compiler S&P Global Market Intelligence, said the headline figure signalled “a robust improvement in conditions in the non-oil economy.”

“Input costs notably fell for the first time since January 2021, as lower fuel prices helped to ease the burden on companies’ expenses and encouraged price drops for other items. The renewed decrease marked a considerable turnaround in inflationary pressures, which had reached an 11-year high in June,” he said.

“The data offers hope for other countries struggling with persistent inflation, although concerns remain that global energy supply constraints will continue to push prices higher.”

The output sub-index rose to 64.5 in August from 62.5 in July, also scaling its highest since June 2019. The series average is 57.6.

The employment sub-index rose to 51.5 from 51.0 in July, its fourth consecutive month of expansion and its fastest pace in a year. It was slightly above the series average of 51.3.

“Where higher staffing was recorded, respondents attributed this to new projects, increased demand and the hiring of administration workers,” the survey said.

Despite the positive figures, sentiment for future output over the next 12 months dropped to its lowest since March 2021, “amid warning signs that the global economy could enter a recession towards the end of the year,” Owen said.

Only 10% of firms surveyed expect to see an expansion in activity in the next year, though only 1% predicted a contraction.

(Reporting by Yousef Saba; Editing by Hugh Lawson)

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