UAE Non-Oil Private Sector Growth Improves Slightly

The S&P Global UAE PMI rose to 52.6 in May 2026 from 52.1 in the previous month, signaling a modest improvement in non-oil private sector business conditions. Output growth accelerated to a three-month high, supported by stronger demand, project expansion, and government-backed initiatives. However, growth remained subdued overall as regional geopolitical tensions, supply-chain disruptions, and rising operating costs weighed on activity. New business growth remained near April's 62-month low, while export sales continued to decline. Meanwhile, employment growth slowed to its weakest pace since October amid softer demand, higher costs, and increased automation. Supply-chain conditions deteriorated, with delivery times lengthening to the greatest extent since April 2020 due to disruptions in the Strait of Hormuz, while input costs rose at the second-fastest pace in nearly two years, driven by higher material and transport costs.

The S&P Global UAE PMI fell to 52.1 in April 2026 from 52.9 in March, marking the weakest improvement in operating conditions since February 2021, as non-oil private sector momentum continued to ease. New orders slowed to a more than five-year low amid weaker client spending and softer tourism. Export orders fell sharply, recording one of the steepest declines on record outside the pandemic period due to Middle East shipping disruptions and Strait of Hormuz constraints. Despite softer demand, output still expanded solidly on ongoing project and infrastructure work. However, cost pressures intensified, with input price inflation accelerating to its strongest level since mid-2024 on higher oil and transport costs. Firms responded by sharply lifting selling prices, with output charges increasing at the fastest pace since 2011 as companies sought to protect margins amid rising costs and supply disruptions. Employment growth also softened as hiring slowed, while salary inflation eased.

The S&P Global UAE PMI fell to 52.9 in March 2026 from 55.0 in February, marking the joint-lowest reading since mid-2021 but still indicating a modest improvement in non-oil private sector conditions. The decline reflected a sharp slowdown in output growth, as conflict in the Middle East disrupted supply chains and weighed on demand. New orders continued to rise, though at a seven-month low, with softer tourism and rising uncertainty cited by firms. Supply conditions deteriorated notably, with delivery times lengthening for the first time in over four years due to shipping disruptions, particularly around the Strait of Hormuz. At the same time, input costs surged, prompting firms to increase selling charges at the fastest pace in nearly 11-and-a-half years. Confidence also weakened to a five-year low, reflecting concerns over prolonged disruptions, even as long-term growth prospects and government spending plans continued to offer some support.