DUBAI, Feb. 5 (Xinhua) -- Data showed a monthly decline in the performance of United Arab Emirates' (UAE) non-oil private sector in January, said Dubai's biggest bank Emirates NBD Monday.
The survey-based Purchasing Managers' Index (PMI), a composite indicator designed to assess the overall performance of the non-oil private economy, stood at 56.8 in January, down from 57.7 last December, according to the statement.
The introduction of a 5 percent value-added tax (VAT) in the UAE on Jan. 1, 2018 on most goods and services had an impact on the pricing and purchasing during the month, said the bank.
"Overall input costs rose at a much faster pace than in December. Companies often link the higher purchase prices to the impact of the new VAT," said the report.
"The January survey indicated that non-oil sector growth got off to a strong start in 2018, in spite of the slight decline in the headline index," said Khatija Haque, head of Middle East and North Africa Research at Emirates NBD.
Education, healthcare and transport are exempted from VAT, as well as several UAE's industrial free zone including Dubai Airport free zone and Dubai free port zone in Jebel Ali.
Small businesses with annual revenues of less than 100,000 U.S. dollars are also exempted from registering for the VAT scheme.
Rates of expansion in both input buying and stocks of purchases slowed down at the beginning of this year, said the study, adding that "respondents indicated that stock-building in advance of the VAT introduction meant that inventories were sufficient to deal with current workloads."
On a positive note, Emirates NBD said "although modest, the rate of job creation was the fastest since January 2017."
