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UAE November business activity eases

Private sector business activity in the United Arab Emirates (UAE) eased in November from a 15-month peak in the previous month as new orders and job creation weakened, a purchasing managers’ survey showed
The HSBC UAE Purchasing Managers’ Index (PMI), which measures the performance of the country’s manufacturing and services sectors, fell to 52.9 points in November after hitting 53.8 points in October, the highest level in the survey’s history. 
It is still holding above the 50 point mark that separates growth from contraction.  
“The softening of the headline number masks a broadly encouraging underlying story. Output and new orders are still in solid growth territory, and employment is rising,” said Simon Williams, chief economist for Mena at HSBC Bank in Dubai.  
“The numbers also show that there is still a lot of excess capacity in the economy. There is no inflationary pressure in the UAE and that’s unlikely to change anytime soon.”   
UAE consumer prices climbed to an 18-month high of 1.9 percent on an annual basis in October, but they are still well below a record high of 12.3 percent in 2008.
The output sub-index for UAE non-oil private sector firms decelerated to 57.3 points in November from its record-high of 57.9 in October but was still at its second-highest level since the survey began in August 2009.  
The new orders index fell to 53.8 points in November, but still remained solid, the survey of 400 private sector firms showed.  
The UAE’s biggest retailer, Bin Hendi Enterprises, said this month it was optimistic about the country’s recovery and predicted sales growth of 3 to 4 percent this year.
The PMI data indicated that firms took on additional staff and raised buying activity, although November saw the mildest rise in non-oil private sector job growth in the series’ history.  
Dubai debt woes have been weighing on economic recovery in the UAE this year. In a Reuters poll, analysts raised their forecasts for UAE economic growth this year to 2.4 percent after state-owned Dubai World sealed a $24.9 billion debt restructuring deal.

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