Data from Standard & Poor’s Global showed a decline in the index of business activity in the non-oil private sector of the UAE in April last year due to increased inflationary pressure and rising costs for companies.
In its report released on Monday, the agency indicated that the index fell from 54.8 points in March to 54.6 points in April.
The index remained above the neutral level (50.0 points), reflecting a strong improvement in conditions in the UAE’s non-extractive sector following early measures to combat the coronavirus pandemic.
According to the report, non-oil companies in the UAE maintained a strong level of growth in activity in April… “This improvement was supported by improved consumer demand and a sharp increase in exports.”
The report says that rising energy and material prices due to the Russian-Ukrainian war and disruptions caused by the epidemic have led to another strong increase in production costs for companies.
The companies continued to benefit from an increase in new orders and design work.
The expansion of this activity was the fastest since December last year, when less than a quarter of the companies in the study saw an increase in production.
The report goes on to say: “Growth in new orders remained strong in April, although it eased slightly to its lowest level in 3 months.”
The report indicated that market demand is still recovering from the Corona restrictions, while some companies continue to benefit from increased sales due to the exhibition.
The recovery has been particularly strong in exports, with the latest data pointing to the fastest growth in new foreign business since January 2021.
The report tracked companies raising selling prices in an attempt to shift at least some of the burden of higher costs onto their customers.
PMI is based on five main components: new orders, stock levels, production, supplier shipments, and employment and work environment.
Source: El Iktisad
