According to the latest S&P Global UAE Purchasing Managers’ Index (PMI), the UAE Non-Oil Private Sector saw its strongest performance in seven months in September due to the faster growth in new businesses and steady output expansion.
Moreover, the seasonally adjusted PMI rose to 54.2 from 53.3 in August, which signals a strong improvement in the operating conditions across the non-oil sector. Moreover, analysts note that any reading above 50 indicates expansion.
Stronger Demand Fuels Growth
As we mentioned earlier, the sharp rebound in new businesses was a stronger reason behind the growth surge in September. However, domestic demand also plays an important role. Yet, foreign sales also improved slowly.
David Owen, Senior Economist at S&P Global Market Intelligence, stated, “The UAE PMI made up some lost ground in September after a trend moderating growth in the middle of the year. The latest readings of 54.2 suggest that the non-oil business performance has recovered well since its trough in July.”
More than 30 percent of firms reported higher new order values, which indicates a clear upturn in client activity. Moreover, the data show a growing momentum in the domestic market, even as export sales showed modest growth.
Employment and Output on the Rise in the UAE Non-Oil Private Sector
Rising demand motivated companies to expand production and increase hiring. Hence, the employment grew at the fastest speed since May. However, firms also attracted the existing inventories to fulfill orders, which is the third consecutive monthly decline in the stock levels.
Despite the strong demand, competitive pressure remained the main concern. Hence, companies hesitated to raise the price, which limited the impact of the higher input costs. So, Owen said, “Competitive pressure was again noted as an important issue. Many panellists connected it to purchasing and pricing decisions. Backlog rose at a slower speed than earlier in the year.”
Dubai Reflects National Trend
Dubai imitates the national performance due to its PMI rising to 54.2 from 53.6 in August. Moreover, non-oil companies in the emirates reported stronger new work, increased hiring, and greater optimism for the final quarter of 2025. However, input costs hit a high. So, businesses reduced selling prices for the first time since November 2024, which highlights the intense market competition.
Outlook: Renewed Business Confidence
Companies across the UAE expressed the continued optimism due to government initiatives, new projects, and strong domestic demand. Moreover, the PMI reports highlight that the non-oil sector is regaining momentum after a mid-year slowdown.
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