Expansion in the UAE’s non-oil private sector has remained sharp, marking the strongest recorded quarter in two years. The recent improvements in business conditions was driven by above-average expansions in both output and new orders. According to the latest UAE PMI survey.

The data also revealed that new business from overseas slipped back to contraction, indicating that the recovery was driven by domestic demand. On the price front, output chargers fell, whilst input price inflation softened to a four-month low.

Sponsored by Emirates NBD and produced by HIS Markit, contains original data collected from a monthly survey of business conditions in the UAE non-oil private sector.

Commenting on the UAE PMI survey, Khatija Haque, Head of MENA Research at Emirates NBD, said, “Although the headline purchasing managers index eased slightly in September, the average reading for Q3 was the highest in two years, underpinned by strong growth in output and new work. The survey suggests that economic growth accelerated last quarter, and that domestic demand remains solid, despite relatively modest jobs growth.”

The headline seasonally adjusted Emirates NBD UAE Purchasing Mangers’ Index eased from the 30-month high of 57.3 recorded in August to 55.1 in September. However, growth remained strong overall and steeper than the survey’s historical average. The average in the third quarter of 2017 was 56.1, the strongest since the third quarter of 2015 (56.3).

Firms in the non-oil private sector reported a sharp increase in output in September. The speed of growth was steep overall and above the series’ long-run average. That said, the pace of expansion slowed from the four-month high registered in August. Employment levels continued to rise for the seventeenth month running in September. That said, job creation eased since August and was only slight overall.

Average cost burdens ascended at the slowest pace for four months in September. The downtick was driven by softening pay pressures and slower input cost inflation.

An uptick in business confidence was also recorded in September. Hopes of an upturn in demand for goods and services produced in the UAE’s non-oil private sector underpinned optimism towards future growth.