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S&P Global’s August survey placed the UAE Purchasing Managers’ Index at 55.3, up from 52.7 in July and marking the strongest improvement in non-oil private sector conditions since December 2024. New business rose at the joint-fastest rate in more than two years while output growth accelerated to a six-month high, pointing to a solid start for the third quarter. Export orders expanded for a second consecutive month at the quickest pace in 21 months as regional conditions improved. The latest reading follows a rebound from the near-stagnation level of 50.8 recorded in June, according to the same S&P Global series.
New orders outpaced capacity and drove a rapid buildup in backlogs of work at the fastest rate so far this year, S&P Global reported. Purchasing activity rose sharply as firms rebuilt inventories at the strongest rate since November 2023, shifting toward more local suppliers amid smoother vendor performance that improved for a third month running. These developments occurred even as businesses navigated an environment still shaped by earlier regional tensions.
Employment contracted for the second time in three months though the decline stayed marginal, S&P Global figures show, with companies remaining cautious about hiring. Input cost inflation eased to its lowest level since February despite higher energy and construction material prices while selling price inflation remained modest amid competitive pressures. The survey covered a broad sample of non-oil private sector firms across the country.
Business confidence strengthened to its highest level since April, supported by improving sales, upcoming construction projects and expectations that regional tensions would continue to moderate, according to the S&P Global report. David Owen, principal economist at S&P Global Market Intelligence, said the UAE’s non-oil economy has shifted decisively into a higher gear. Owen added that firms are adapting more effectively to the current market environment.
Dubai’s non-oil private sector PMI rose to 54.1 in August from 51.7 the month before, mirroring the national upturn with stronger customer demand and output, S&P Global data indicated. The emirate had seen its weakest non-oil expansion in more than five years in June when its index fell to 50.7. Parallel gains across the broader UAE non-oil economy underscore the resilience of diversification efforts.
The non-oil sector accounted for 79.4 percent of real GDP in the first quarter of 2026, up from 78 percent a year earlier, according to Federal Competitiveness and Statistics Centre figures that also showed non-oil growth of 4.8 percent. Sectors such as financial services, construction, health and information technology led those earlier gains. The latest PMI acceleration suggests the non-oil economy is building momentum heading into the final months of the year.
