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Boosted by higher oil prices, business conditions in the UAE’s non-oil private sector continued to gain momentum in February as output and new orders accelerated. “Strong demand conditions and a favorable economic environment encouraged companies to scale up purchasing activity and hire additional workers over the month. On the price front, average selling prices rose for the first time in almost one-and-a-half years as firms passed on to client’s part of their additional cost burdens.

The seasonally adjusted Emirates NBD UAE Purchasing Managers’ Index, which covers manufacturing and services, rose to 56.0 in February from 55.3 in January. The 50-point level divides expansion from contraction.

The rise in the UAE PMI to the highest level since September 2015 suggests that demand has strengthened, both domestically and abroad.

New business inflows rose sharply and at the fastest rate since September 2015, which survey participants linked to strong underlying demand and better economic conditions. With new export orders also expanding markedly over the month, companies raised output further. In fact, growth of business activity climbed to an 18-month peak.

According to the survey report, non-oil private sector companies in the UAE expect the favorable economic scenario to be sustained over the coming 12 months, with one-in-five companies forecasting output growth in the year ahead. In fact, the level of positive sentiment was at a five-month high in February. Optimism reportedly reflected aggressive marketing campaigns, strong demand and new projects in the pipeline.

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