ABU DHABI: Growth of the United Arab Emirates’ non-oil private sector continued slowing in February after the introduction of a 5 percent value-added tax at the start of the year, a survey showed on Monday.
The seasonally adjusted Emirates NBD UAE Purchasing Managers’ Index, which covers manufacturing and services, fell to a five-month low of 55.1 last month from 56.8 in January. Above 50 indicates expansion and below shows contraction.
The key components of the survey point to strong domestic demand, but firms were notably more cautious than they were in January about the prospects for output growth over the coming 12 months.”
Input price inflation fell sharply in February to 53.2 as the initial impact of the tax on price levels faded. Output price inflation turned slightly negative with a reading of 49.4 – a sign that companies might be absorbing some of the cost of the tax to keep market share.
