HSBC UAE: Output Levels and Rate of Job Creation Rise in Non-Oil Producing Private Sector, While Growth of New Work Eases

  HSBC UAE: Output Levels and Rate of Job Creation Rise in Non-Oil Producing
                Private Sector, While Growth of New Work Eases

  PR Newswire

  DUBAI, UAE, May 23, 2013

DUBAI, UAE, May 23, 2013 /PRNewswire/ --

Summary

According to the HSBC United Arab Emirates PMI™, the UAE's non-oil producing
private sector companies reported a further increase in output levels in
April. While new orders continued to rise sharply, the rate of increase eased
to the slowest in a year. Meanwhile, employment levels rose at the fastest
pace in two years.

The seasonally adjusted HSBC United Arab Emirates PMI™ - a composite indicator
designed to provide a single-figure snapshot of the performance of the non-oil
private sector - posted 54.0 in April, down slightly from 54.3 in March, and
pointed to a further improvement of operating conditions in the UAE. While
April data marked the forty-fourth successive improvement, the latest reading
was the lowest in five survey periods.

Output levels in the UAE's non-oil producing private sector rose further
during the latest survey period. Increased incoming new business and improving
market conditions were cited by panellists as having contributed to the latest
rise.

Order book volumes increased sharply in April, albeit at the slowest pace in a
year. Panellists linked growth of new work to improved sales team efforts and
good market conditions. New business from international trade also increased
at the slowest pace in nine months amid reports of economic slowdowns in
export markets.

The UAE's non-oil producing private sector companies indicated a second
successive monthly fall in outstanding business during the latest survey
period, and linked the decline in work-in-hand to the hiring of additional
staff and efficiency improvements. Meanwhile, suppliers' delivery times
continued to improve. There was some anecdotal evidence that the improvement
in average lead times was driven by long-term relationships with suppliers and
faster payments.

April data pointed to a further increase in employment levels and the rate of
job creation accelerated to the highest in two years. Overall input prices
rose during April, and at a marginally sharper rate than in the previous
month. Purchase prices increased in line with general inflationary pressures,
while the rate of staff cost inflation quickened to the fastest in three
months. Meanwhile, output prices charged by the UAE's non-oil producing
private sector firms fell for a second consecutive month.

Purchasing activity continued to increase in April, albeit at the slowest pace
in a year. Where a rise was reported, companies often linked this to increased
incoming new business. Stocks of raw materials and other pre-production
inventories were broadly unchanged from March.

Comment

Commenting on the UAE PMI™ survey, Simon Williams, Chief Economist for Middle
East & North Africa at HSBC, said:

"It's another solid reading that strongly suggests the UAE economy is
maintaining momentum well. The softer export   reading is a concern, but
overall new orders are still strong, employment is rising and output is up. We
continue to look for overall growth of around 4% this year, with Dubai likely
to be the outperformer."

Key points

  *Further rise in output levels
  *Growth of new work eases to 12-month low
  *Rate of job creation accelerates to two-year high

Notes to Editors:

The HSBC Purchasing Managers' Index™ is based on data compiled from monthly
replies to questionnaires sent to purchasing executives in approximately 400
private sector companies, which have been carefully selected to accurately
represent the true structure of the United Arab Emirates economy, including
manufacturing, services, construction and retail. The panel is stratified by
Standard Industrial Classification (SIC) group, based on industry contribution
to GDP. Survey responses reflect the change, if any, in the current month
compared to the previous month based on data collected mid-month. For each of
the indicators the 'Report' shows the percentage reporting each response, the
net difference between the number of higher/better responses and lower/worse
responses, and the 'diffusion' index. This index is the sum of the positive
responses plus a half of those responding 'the same'.

The Purchasing Managers '  Index ™  (PMI™ ) is a composite index based on
five of the individual indexes with the following weights: New Orders - 0.3,
Output - 0.25, Employment - 0.2, Suppliers' Delivery Times - 0.15, Stock of
Items Purchased - 0.1, with the Delivery Times index inverted so that it moves
in a comparable direction.

Diffusion indexes have the properties of leading indicators and are convenient
summary measures showing the prevailing direction of change. An index reading
above 50 indicates an overall increase in that variable, below 50 an overall
decrease.

Markit do not revise underlying survey data after first publication, but
seasonal adjustment factors may be revised from time to time as appropriate
which will affect the seasonally adjusted data series. Historical data
relating to the underlying (unadjusted) numbers, first published seasonally
adjusted series and subsequently revised data are available to subscribers
from Markit. Please contact economics@markit.com .

HSBC:

HSBC is one of the world's largest banking and financial services
organisations, with around 6,600 offices in both established and
faster-growing markets. We aim to be where the economic growth is, connecting
customers to opportunities, enabling businesses to thrive and economies to
prosper, and ultimately helping people to fulfil their hopes and realise their
ambitions.

We serve around 58 million customers through our four global businesses:
Retail Banking and Wealth Management, Commercial Banking, Global Banking and
Markets, and Global Private Banking. Our network covers 81 countries and
territories in six geographical regions: Europe, Hong Kong, Rest of
Asia-Pacific, Middle East and North Africa, North America and Latin America.
Our aim is to be acknowledged as the world's leading international bank.

Listed on the London, Hong Kong, New York, Paris and Bermuda stock exchanges,
shares in HSBC Holdings plc are held by about 220,000 shareholders in 129
countries and territories.

About Markit:

Markit is a leading, global financial information services company with over
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processing across all asset classes in order to enhance transparency, reduce
risk and improve operational efficiency. Its client base includes the most
significant institutional participants in the financial market place. For more
information please see http://www.markit.com

About PMIs:

Purchasing Managers '  Index™ (PMI™) surveys are now available for 32
countries and also for key regions including the Eurozone. They are the most
closely-watched business surveys in the world, favoured by central banks,
financial markets and business decision makers for their ability to provide
up-to-date, accurate and often unique monthly indicators of economic trends.
To learn more go to http://www.markit.com/economics

The intellectual property rights to the HSBC UAE  PMI™   provided herein is
owned by Markit Economics Limited. Any unauthorised use, including but not
limited to copying, distributing, transmitting or otherwise of any data
appearing is not permitted without Markit's prior consent. Markit shall not
have any liability, duty or obligation for or relating to the content or
information ("data") contained herein, any errors, inaccuracies, omissions or
delays in the data, or for any actions taken in reliance thereon. In no event
shall Markit be liable for any special, incidental, or consequential damages,
arising out of the use of the data.  Purchasing Managers' Index™   and 
PMI™   are trade marks of Markit Economics Limited, HSBC use the above marks
under license. Markit and the Markit logo are registered trade marks of Markit
Group Limited.

Contact: For further information, please contact: HSBC: Simon Williams, Chief
Economist, HSBC Middle East & North Africa, Telephone +971-4-423-6925, Email
simon.williams@hsbc.com ; Ahmad Othman, Media Relations, Tel: +971 4 423 5628,
Email ahmadothman@hsbc.com ; Markit: Oliver Kolodseike, Economist, Telephone
+44-1491-461-003, Email oliver.kolodseike@markit.com; Caroline Lumley,
Corporate Communications, Telephone +44-20-7260-2047, Mobile +44-781-5812-162
, Email caroline.lumley@markit.com
 
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