August saw the fastest expansion in the UAE’s private non-oil economy in more than a year and a half on account of new order increases, rising output levels, and easing costs, fresh S&P Global figures have shown.
The seasonally adjusted UAE Purchasing Managers’ Index shot up to 55.3 last month from 52.7 in July, which was the second consecutive month of acceleration and the most favorable business conditions seen since December 2024. Readings above 50 on the index show that the economy is growing.
The main reason for the positive figures was the sharpest increase in new orders recorded in more than two years due to higher customer demand levels and waning nervousness about the economy.
Also, export orders were increasing for a second consecutive month after the negative trend during the second quarter of the year.
Output climbed to a six-month high, with companies pointing to fuller order books, faster project execution, a shift among clients toward digital services, and smoother logistics as key drivers.
David Owen, principal economist at S&P Global Market Intelligence, said the non-oil economy had moved into “a higher gear,” with brisker demand matched by quicker deliveries and softer input-cost inflation.
A notable shift is also underway in sourcing strategy: more UAE businesses are turning to domestic suppliers to insulate their operations from geopolitical shocks, a move that has shortened delivery times and boosted purchasing activity.
Firms built up inventories at the fastest rate in almost three years, reflecting growing confidence in future demand. Input costs eased to their lowest level since February, even as firms flagged higher prices for energy, fuel, cement, steel and chemicals.
Dubai mirrored the national trend, with its non-oil PMI rising to 54.1 from 51.7, powered by stronger client spending and export trade, and both output and new orders hitting six-month highs.
Business sentiment across the UAE for the year ahead climbed to its highest point since April, buoyed by strong sales, active construction pipelines and hopes of easing regional tensions. UAE Interact
