The UAE’s non-oil private sector recorded its fastest improvement in business conditions since December 2024 in August, supported by stronger new orders, rising output and easing cost pressures, according to the latest S&P Global survey.
The seasonally adjusted S&P Global UAE Purchasing Managers’ Index (PMI) climbed to 55.3 in August from 52.7 in July, marking a second consecutive month of accelerating growth. A reading above 50 indicates an improvement in business conditions.
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New business increased at the joint-fastest pace in more than two years, as companies reported stronger customer activity and an easing of economic caution.
Export demand also increased for a second consecutive month after declining throughout the second quarter.
Output growth hits six-month high
Business activity strengthened further in August, with output expanding at the fastest rate in six months.
Companies linked the increase to stronger order books, progress on projects, customers moving towards digital services and fewer logistics challenges.
David Owen, Principal Economist at S&P Global Market Intelligence, said the UAE’s non-oil economy had “shifted decisively into a higher gear”, with stronger demand accompanied by faster deliveries and softer cost pressures.
UAE companies turn to local suppliers
Businesses are also increasingly turning to domestic suppliers to strengthen their supply chains and reduce exposure to geopolitical disruptions.
S&P Global said this helped shorten delivery times and supported stronger purchasing activity.
Companies accumulated inventories at the fastest rate in nearly three years, indicating increased confidence in future demand and efforts to protect themselves against possible supply disruptions.
Supply conditions also improved, helping input cost inflation ease to its lowest level since February, despite higher reported costs for energy, fuel, cement, steel and chemicals.
Dubai business activity strengthens
Dubai’s non-oil private sector also recorded stronger growth in August.
The Dubai PMI jumped to 54.1 from 51.7 in July, as businesses reported stronger client spending and improved export trade. Output and new-order growth reached six-month highs.
Business expectations across the UAE for the coming year also improved to their highest level since April, supported by stronger sales trends, construction projects and hopes for an easing of regional tensions.
Source: Khaleej Times