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HSBC Purchasing Managers’ Index™ Press Release
Embargoed until: 09:30 (Dubai), 4 November 2014
HSBC UAE PMI™
UAE PMI surges to new record high in October
Summary
HSBC PMITM data for the non-oil private sector
economy of the United Arab Emirates signalled the
strongest improvement in business conditions in the
survey’s five-year history in October. Output, new
business, purchasing activity and employment all rose
at survey-record rates, while average wages/salaries
increased at the strongest pace since the series began
in August 2009. Average purchase prices rose at the
fastest rate in just over two-and-a-half years. New
export business bucked the wider trend in new work,
registering the slowest expansion since January – albeit
a strong overall pace nonetheless.
The survey’s headline figure is the HSBC UAE
Purchasing Managers’ Index™ (PMI) – a composite
indicator designed to give a single-figure snapshot of
operating conditions in the non-oil private sector
economy. It is derived from indicators for new orders,
output, employment, suppliers’ delivery times and
stocks of purchases. Readings above 50.0 indicate an
overall improvement in business conditions, below 50.0
an overall deterioration.
Inflationary pressures built up in October amid greater
demand for inputs and staff. Salary/wage inflation
accelerated for the fifth successive month, to the fastest
recorded in the survey history. Meanwhile, average
purchase prices rose at the fastest rate since March
2012. Output prices rose at the fastest rate since mid2011. The increase followed a fractional decline in
September and was linked to higher costs and stronger
demand.
Comment
Commenting on the UAE PMI™ survey, Simon Williams,
Chief Economist for Middle East & North Africa at HSBC
said:
“The pick up in prices pressures captured in this
month's data is of concern but the dominant story is one
of a UAE economy in full growth mode. The
performance is all the more impressive given the
decline in oil prices over the same period, and the
continued downturn in emerging markets elsewhere”.
The PMI rose sharply to 61.2 in October, from 57.6 in
September, signalling a rapid improvement in business
conditions at non-oil private sector firms. The latest
figure was the highest since the survey started in
August 2009, and the month-on-month gain since
September was also a survey record. Four of the PMI’s
five components posted record highs in October, the
exception being suppliers’ delivery times.
Key points
 Six survey indicators hit record highs, including
Business activity at non-oil private sector firms in the
UAE rose at the fastest pace in the survey history in
October. This mirrored a record rise in the level of
incoming new business, with survey respondents
reporting strong underlying demand and greater
marketing efforts. New export business also rose at a
marked pace, albeit the weakest registered since
January.
Historical Overview
Record gains in new work imparted further pressure on
operating capacity in October. Backlogs of work rose for
the sixth consecutive month, and at the third-fastest rate
in the survey history. This was despite a series-record
rise in non-oil private sector employment during the
month.
Rising business requirements and a positive outlook led
firms to raise purchases of new inputs at the fastest rate
in the survey history in October. This also generated a
record expansion in stocks of purchases. Suppliers’
delivery times continued to improve despite greater
pressure on capacity.
output, new orders and employment

Slower expansion in new export business

Salary inflation at series-record high
HSBC United Arab Emirates PMI
50 = no change on previous month, S.Adj.
Increasing rate of growth
65
60
55
50
Increasing rate of contraction
45
2010
Sources: Markit, HSBC
2011
2012
2013
2014
For further information, please contact:
HSBC
Simon Williams, Chief Economist,
HSBC Middle East & North Africa
Ahmad Othman
Media Relations
Telephone +971-4-423-6925
Email [email protected]
Tel: +971 4 423 5628
Email [email protected]
Markit
Amy Brownbill, Economist
Telephone +44-1491-461-063
Email [email protected]
Joanna Vickers, Corporate Communications
Telephone +44-20-7260-2234
Email [email protected]
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 [email protected].
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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 www.markit.com/economics
The intellectual property rights to the HSBC UAE PMI™ provided herein are owned by or licensed to 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 either registered trade marks of Markit Economics Limited or
licensed to Markit Economics Limited. HSBC use the above marks under license. Markit is a registered trade
mark of Markit Group Limited.