IHS PMI data indicates UAE, Saudi Arabia and Qatar stay marginally above average in February
February saw a slight growth acceleration in global manufacturing production, keeping the rate of expansion among the best registered over the past decade, according to IHS Market Purchasing Managers' Index. However, the sector remained beset by supply-chain disruptions and rising cost inflationary pressures. We took a look at how UAE, Saudi Arabia and Qatar did on their PMI data. 23 out of the 29 nations for which February data were available had a PMI reading above the 50.0 mark.
PMI data are compiled by IHS Markit for more than 40 economies worldwide. The monthly data are derived from surveys of senior executives at private sector companies. The PMI dataset features a headline number, which indicates the overall health of an economy, and sub-indices, which provide insights into other key economic drivers such as GDP, inflation, exports, capacity utilization, employment and inventories.
The latest UAE PMI survey data indicated fresh disruptions to the UAE non-oil private sector in February, as rising COVID-19 cases led to increased restrictions in parts of the economy and hampered customer sales. The seasonally adjusted PMI – a composite indicator designed to give an accurate overview of operating conditions in the non-oil private sector economy – fell from 51.2 in January to 50.6 in February for UAE to indicate a slower and only marginal improvement in business conditions.
The index stayed above the 50.0 neutral threshold largely due to the output which continued to signal a rise in business activity in the UAE’s non-oil economy. New business failed to rise for the first time in four months, contributing to just a modest rise in output and a broadly unchanged employment level. Business expectations improved, but only gradually as restrictions led to further uncertainty about short-term growth prospects despite hopes for a rebound in the latter half of 2021.
Firms also signalled that global supply chain delays impacted on the UAE economy in February, as lead times on inputs lengthened at the fastest rate since last April. However, the impact on costs has so far been limited, allowing companies to continue offering discounts on sales.
Economic conditions in Saudi Arabia continued to strengthen in February, according to the country’s latest PMI survey data, but the rate of growth eased to a four-month low as both output and new orders expanded at weaker rates. Employment lagged the recovery in output again as firms reduced job numbers for the third month running, although input purchases and inventories continued to climb. Firms remained hopeful that the impact of COVID-19 will lessen over the coming year, despite business optimism falling to the lowest since last October.
The IHS Markit Saudi Arabia PMI posted at 53.9 in February, to indicate a solid improvement in the health of the non-oil private sector economy. The index fell from January's recent high of 57.1 and was the lowest recorded in four months. Nevertheless, the PMI remained above the 50.0 growth threshold and suggested a further recovery in business conditions from the initial impact of the COVID-19 pandemic. The output, new orders and stocks of purchases sub-components drove the index into positive territory, despite each recording a lower reading than in January.
Private sector output increased solidly during February, which surveyed firms largely attributed to stronger client demand. However, the rate of growth softened for the first time since activity began to rise last September. Likewise, firms saw higher inflows of new work, but the expansion slowed since the start of 2021.
The latest PMI survey data from Qatar Financial Centre and IHS Markit indicated a sustained strong upturn in the non-energy private sector economy at the start of 2021. The PMI registered 53.2 in February, slightly down from 53.9 in January.
Output as well as new business both rose at elevated rates, and following sustained elevated demand, employment increased for a survey-record fifth successive month. Supply chains remained stable despite a ramping up of purchasing activity, and firms were also able to keep on top of levels of outstanding business during the month. Expectations regarding output over the next 12 months continued to be positive. As a further indication of businesses adjusting to healthy demand, firms raised their prices charged for goods and services at one of the fastest rates since the survey began in April 2017.