Non-oil business activity in the United Arab Emirates increased by the most in over two-years in September. This fact was revealed by HSBC on Thursday. It is attributed on increase in output growth and rise in export activities.
The bank’s purchasing managers index, or PMI, jumped to 56.6 in September, a 29-month high, from 54.5 in August. A reading above the neutral 50 level indicates the economy is expanding. As this is indeed an optimistic projection, it is not surprising at all as September marks the start of a new business season.
HSBC said output growth was the highest since May 2011, the beginning of the summer season in the Gulf. It is largely attributed to increased new business. Evidence suggested that higher new business was driven by improved market conditions, increased sales efforts and the introduction of new products.
However, most recent announcement about rises in wages may mean that price pressures are starting to build in the emirates. Having into consideration the rising rents, accelerating inflation is becoming a major concern.
HSBC’s PMI index is compiled with data provider Markit and based on data compiled from monthly replies to questionnaires sent to purchasing executives in approximately 400 private sector companies.
