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Business conditions in UAE at record high

A new survey showed that private sector business activity in the UAE hit a record high in February thanks to new orders and output rising sharply.

The HSBC UAE Purchasing Managers' Index (PMI), which measures the performance of the OPEC member's manufacturing and services sectors, rose to 54.3 points in February, its highest level since the series began in August 2009.

"The latest readings strengthen our view of the UAE that recovery is gaining traction and beginning to build speed," said Simon Williams, chief economist for MENA at HSBC Bank in Dubai, reported Reuters.

The new orders index rose to 57.6 points in February, up from 56.1 points in the previous month, which panelists linked to improving economic conditions and company expansions, the survey of 400 private sector firms showed.

Overall input and output prices both climbed to a series record high, driven by higher fuel and raw material prices. UAE consumer inflation eased to 1.6 per cent on an annual basis in January as an unexpected drop in food costs pushed prices into a second monthly decline in a row.

It is unclear how much damage has been created by the popular unrest sweeping in the Middle East. "It's too soon to judge what impact regional unrest is having on growth prospects. Next month's PMIs though should give us a clearer steer," Williams said.