UAE Non-Oil Sector Growth Hits 9-Month High

The S&P Global UAE PMI rose to 54.9 in January 2026 from 54.2 in December, marking the strongest reading in nearly a year and pointing to a broad-based improvement in operating conditions. Growth was driven by a sharp acceleration in new business, which expanded at its fastest pace in almost two years as domestic demand improved and new products and services gained traction. Strong order inflows drove activity, while firms increased purchasing at the fastest pace in over six years, aided by quicker deliveries and smoother logistics. On the other hand, input prices rose at the fastest rate in 18 months, driven by higher raw material costs, wages, and operating expenses, yet competitive pressures limited selling price increases, keeping profit margins under pressure. Looking ahead, firms remain optimistic about demand. Despite inflationary headwinds, robust sales growth, improved supply chains, and positive expectations suggest the non-oil sector enters 2026 on solid footing.

The S&P Global UAE PMI eased slightly to 54.2 in December 2025 from November’s nine-month high of 54.8, but continued to signal a robust improvement in non-oil private sector conditions. Business activity expanded at one of the fastest rates seen this year, supported by firm demand, rising customer orders, and favourable domestic policies. Output growth remained strong, with over a quarter of firms reporting higher production as workloads increased. Employment growth, however, was more cautious, as companies faced intensifying cost pressures and tighter margins. Input costs rose at the sharpest pace in over a year, driven by higher wages, transport, and maintenance expenses, prompting firms to manage costs through leaner inventories. Despite these pressures, selling prices increased modestly and business confidence stayed positive, underpinned by stronger sales pipelines and resilient demand heading into 2026.

The S&P Global UAE PMI rose to 54.8 in November 2025 from 53.8 in October, marking the strongest improvement in non-oil private sector conditions in nine months. The pickup reflected firmer demand and a rebound in new business, with sales growth reaching its fastest pace since January. Output also expanded sharply, recording its highest increase so far in 2025 as firms scaled up activity to meet rising workloads. Employment growth quickened to an 18-month high, driven by capacity pressures and delayed payments that added to backlogs. However, the stronger hiring push led to a marked rise in wage costs, contributing to the sharpest increase in overall input expenses in 14 months. Companies raised selling prices modestly to offset these pressures, supported by a favourable market environment. Business confidence improved slightly from October’s recent low, as firms cited stronger pipelines and supportive demand conditions despite ongoing cost concerns.