PMI: Supported by improved customer demand and sharp rise in exports

UAE companies maintain a strong level of activity growth during April

The expansion of corporate activity is the fastest since December of last year.

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The UAE Purchasing Managers' Index (PMI) of S&P Global decreased slightly from 54.8 points in March to 54.6 points in April, the lowest level in three months.

He revealed that non-oil-producing UAE companies maintained a strong level of activity growth in April, supported by improved customer demand and a sharp rise in exports. However, the rise in energy and materials prices due to the Russian-Ukrainian war and the disruption caused by the epidemic led to an increase in the costs of companies' production requirements. This prompted the companies to increase their selling prices for the first time in nine months.

S&P Global said in a statement that the index, which measures the performance of the non-oil private sector, remained above the neutral level of 50 points, indicating a strong improvement in the conditions of the non-oil sector.

The results of the Purchasing Managers Index in the UAE during last April included that one of the main factors in this rise was the sharp increase in the production of non-oil producing companies, at the beginning of the second quarter of the year, as companies continued to benefit from the increasing new orders and project work, as well as Activity expansion is the fastest since December of last year, with less than a quarter of companies participating in the study seeing an increase in production since March.

New order growth remained strong during the month of April although it eased slightly to a three-month low.

The results indicated that market demand is still recovering from the restrictions of “Covid-19”, while some members of the study continued to benefit from the increase in sales due to the “Expo 2020 Dubai” exhibition.

The recovery was particularly notable in exports, with the latest data indicating the fastest rise in new foreign business since January 2021.

UAE companies suffered another increase in production input costs during the month of April, which was largely related to the increase in energy prices due to the Russian-Ukrainian war.

Companies began increasing selling prices in an attempt to pass on at least part of the burden of increased costs to their customers.

Average production prices rose for the first time in nine months, but only marginally overall.

Companies sought to boost their purchasing activity and inventory in April, after data last month indicated that stockpiling efforts had stalled.

Purchase levels rose at the second fastest rate since August 2019.

The companies remained confident that sales growth would continue to boost production over the next 12 months.

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