The HSBC UAE Purchasing Managers’ Index (PMI), which measures the performance of the UAE’s manufacturing and services sectors, rose to 57.5 points in April, its highest level since the series began in August 2009.

It stood at 54.7 points in March, with 50 marking the point separating growth from contraction. Four hundred private sector firms took part in the latest survey.

“This is a very positive reading that tells me the UAE’s recovery is building momentum. There are still a lot of problems to address, but more than two years after the boom went bust, it’s clear the new growth cycle is under way,” said Simon Williams, chief economist for MENA at HSBC Bank in Dubai.

The global financial crisis led to the shelving of projects worth billions of dollars in Dubai, a trade-focused member of the UAE, dragging down its economy.

Concerns about the indebtedness of Dubai’s state companies have eased after Dubai World sealed a deal last September to restructure almost $25 billion of debt.

Analysts polled by Reuters expect the country’s economy to expand by 3.4 percent this year.

New orders for UAE non-oil private sector firms rose in April to 62.8 points, the fastest rate in the series’ history, up from 58.0 points in the previous month due to good market demand and stable business conditions, the survey showed.

The output index increased for the 15th successive month.

A combination of stronger demand for inputs and political unrest across the Middle East and North Africa pushed up purchasing costs during April, HSBC said. Output price inflation accelerated to a series record as a result.

“As with last month’s numbers, the readings also suggest that price pressures may be in the pipeline later in the year, particularly with the backlogs of work category finally starting to indicate tightening capacity. However, sluggish real estate and credit markets are keeping the CPI contained for now,” Williams said.

Annual consumer price inflation in the UAE edged slightly lower to 1.2 percent in March due to a drop in food and transport costs.