After hitting a two-and-a-half year low during October, the non-oil private sector in the UAE regained some of the growth momentum in the following month, according to a new survey.
Driven by a sharp rise in output, business activity and employment improved solidly in November, the Emirates NBD UAE PMI for the month said.
“While the PMI data points to slower non-oil growth in the UAE this year, relative to 2014, it is important to recognise that the non-oil economy is still expanding at a solid rate, despite the sustained weakness in oil prices, tighter liquidity conditions and increased uncertainty about government spending in the region as we head into 2016,” says Khatija Haque, head of MENA research at Emirates NBD.
The survey, sponsored by Emirates NBD and produced by Markit, however, said the rate of growth in November remained much slower than that seen earlier this year and throughout 2014.
It also showed that the pricing power of companies in the country declined during the month.
The monthly PMI survey for Saudi Arabia showed a rebound in the country’s non-oil private sector as well, after a weak October.
“The improvement in the Saudi Arabian PMI last month is encouraging, particularly against a backdrop of sustained low oil prices and an announced freeze in government spending at the start of Q4,” said Haque.
Meanwhile, the sector saw a downturn in Egypt in November with a sharp fall in output and new business.
“The fall in the PMI was not entirely unexpected this month, particularly following the Russian air disaster. Once again, respondents are citing FX issues as a factor that is resulting in declining output across the private sector, which simply reinforces our view that a macro recovery will depend, in part, on authorities easing capital controls and allowing the EGP to weaken in 2016,” says Jean-Paul Pigat, senior economist at Emirates NBD.