The HSBC United Arab Emirates Purchasing Managers Index rose to the highest level in 19 months in December on external demand and rising public spending, HSBC Holdings Plc said in a report e-mailed today.
The headline index of business conditions in the emirate’s non-oil producing private sector climbed two points to 55.6, the highest since May 2011, according to the report compiled by London-based Markit Economics. New orders rose three points month-on-month to 63, the highest in the PMI series’ three and a half year history, according to the report.
“While the U.A.E. as a whole appears to have gained speed, we suspect that it is Dubai’s export-orientated service sector that has led the way, completing what has been a year of strong economic recovery for the emirate,” Simon Williams and Liz Martins, Dubai-based HSBC economists, wrote in the report.
The U.A.E.’s budget surplus increased to 10.8 percent of gross domestic product from 3.1 percent in 2011, according to HSBC estimates in October.
Dubai, the second-biggest sheikhdom in the U.A.E., is widely considered the region’s commercial and service hub. The government forecasts GDP to expand 5 percent in 2012, the most since 2007. The U.A.E.’s economic growth may slow to 3.7 percent in 2012 from 4.1 percent the previous year, HSBC said in October.