United Arab Emirates: PMI in December drops to lowest level in over three years

The Emirates NDB Purchasing Managers’ Index (PMI) moderated in December, dropping from November’s 54.5 to 53.3. December’s figure marked the lowest level in over three years. Despite the decrease, the PMI remains above the 50-threshold that separates expansion from contraction in the non-oil producing private sector.

In December, the deceleration was due to slow growth of new work, which expanded at the weakest rate since August 2011. Growth in output, employment and input buying also disappointed. Analysts added that, “for 2015 as a whole, the average PMI was lower than for 2014, signalling slower – but positive – growth in the non-oil private sector. However, softer non-oil growth in the UAE last year is likely to have been partially offset by robust oil sector expansion.”

Met the why particular Consensus Forecast participants expect GDP to expand 3.3% in 2016, which is down 0.1 percentage points over last month’s projection. For 2017, the panel sees the economy increasing 3.2%.